Simple Interest Test Review

Front

What is Simple Interest?

Back

Simple Interest is the interest calculated on the principal amount only, without compounding. It can be calculated using the formula: I = P * r * t, where I is interest, P is principal, r is the rate of interest per year, and t is the time in years.

Front

What is the formula for calculating Simple Interest?

Back

The formula for calculating Simple Interest is I = P * r * t, where I is the interest earned, P is the principal amount, r is the annual interest rate (in decimal), and t is the time in years.

Front

If you invest $650 at a 3% annual interest rate, how much interest will you earn in 8 months?

Back

$13.00

Front

How do you convert months into years for interest calculations?

Back

To convert months into years, divide the number of months by 12. For example, 8 months = 8/12 = 2/3 years.

Front

What is the principal amount if you earn $234 in interest at a 3.5% interest rate over 9 months?

Back

$8914.28

Front

How do you find the principal amount using Simple Interest?

Back

Rearrange the formula I = P * r * t to find P: P = I / (r * t).

Front

Calculate the interest earned on a $23,000 investment at 3.2% over 4 years.

Back

$2,944.00

Front

What is the interest earned on a principal of $12,800 at an 8% interest rate over 2 years?

Back

$2,048.00

Front

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

Back

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

Front

If you earned $273.47 in interest from a principal of $8,546.00, what is the interest rate?

Back

3.2%.