Simple Interest #2

Front

What is Simple Interest?

Back

Simple Interest is the interest calculated on the principal amount, or the original amount of money, over a specific period of time at a fixed interest rate.

Front

What is the formula for calculating Simple Interest?

Back

The formula for Simple Interest is: SI = P * r * t, where SI is the simple interest, P is the principal amount, r is the rate of interest per year (in decimal), and t is the time in years.

Front

If the principal is $2000, the rate is 5%, and the time is 2 years, what is the Simple Interest?

Back

The Simple Interest is $2000 * 0.05 * 2 = $200.

Front

How do you find the principal if you know the Simple Interest, rate, and time?

Back

Rearrange the formula: P = SI / (r * t).

Front

If Anna invested $2,500 at an annual rate of 5%, how long will it take to earn $1,125 in interest?

Back

It will take 9 years.

Front

What is the interest earned on a loan of $2000 at a rate of 5% per year for 3 years?

Back

The interest earned is $300.

Front

How do you calculate the interest rate if you know the principal, interest, and time?

Back

Use the formula: r = SI / (P * t).

Front

If the principal is $4,900 and the interest earned is $191.10 over 1.5 years, what is the interest rate?

Back

The interest rate is 2.6%.

Front

What is the time required for $500 to earn $150 as simple interest at an annual rate of 6%?

Back

The time required is 5 years.

Front

What happens to Simple Interest if the principal amount increases?

Back

If the principal amount increases, the Simple Interest will also increase, assuming the rate and time remain constant.