Simple Interest

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What is Simple Interest?

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Simple Interest is the interest calculated on the principal amount only, without compounding. It is calculated using the formula: I = P * r * t, where I is the interest, P is the principal, r is the rate (as a decimal), and t is the time in years.

Front

How do you convert a percentage to a decimal?

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To convert a percentage to a decimal, divide the percentage by 100. For example, 3.85% becomes 0.0385.

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What does the 'I' in the simple interest formula stand for?

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The 'I' in the simple interest formula stands for 'Interest'.

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What is the formula for calculating Simple Interest?

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The formula for calculating Simple Interest is I = P * r * t.

Front

If you have a principal of $1,000, a rate of 5%, and a time of 3 years, what is the simple interest?

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The simple interest is I = 1000 * 0.05 * 3 = $150.

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What is the principal amount in a simple interest calculation?

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The principal amount is the initial sum of money that is invested or borrowed before interest is applied.

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How do you calculate the total amount after interest is applied?

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The total amount after interest is applied can be calculated using the formula: Total Amount = Principal + Interest.

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If Mr. Pham has $410,000 at 3.85% simple interest, how much interest does he earn in one year?

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He earns $15,785 in one year.

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What is the total amount in Jerry's account after borrowing $4,000 for 5 years at 6% simple interest?

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The total amount in Jerry's account after 5 years is $5,200.

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How much interest does Alexton the Skeleton owe after borrowing $4,000 for 5 years at 6% simple interest?

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Alexton owes $1,200 in interest.