Simple Interest

Front

What is Simple Interest?

Back

Simple Interest is the interest calculated on the principal amount only, without compounding. It is typically calculated using the formula: I = P * r * t.

Front

What is the formula for calculating Simple Interest?

Back

I = P * r * t, where I is the interest, P is the principal, r is the rate of interest (in decimal), and t is the time (in years).

Front

If Lisa earned $20 in interest after 1 year at a 5% interest rate, how much did she deposit?

Back

$400

Front

What does 'P' stand for in the Simple Interest formula?

Back

P stands for Principal, which is the initial amount of money deposited or borrowed.

Front

Calculate the interest earned on a principal of $500 at a 5% interest rate over 5 years.

Back

$125

Front

If Amy deposits $200 for 5 years at 5% interest, how much interest does she earn?

Back

$50

Front

What is the rate of interest if a principal of $400 earns $20 in 1 year?

Back

5%.

Front

How does time affect Simple Interest?

Back

The longer the time period, the more interest will be earned, as interest is calculated for each year.

Front

What is the relationship between principal, rate, and interest earned?

Back

Interest earned increases with a higher principal amount or a higher interest rate.

Front

If the interest earned is $60 and the principal is $300, what is the interest rate if the time is 4 years?

Back

5%.