Simple and Compound Interest

Front

What is 8.25% in decimal form?

Back

0.0825

Front

Solve for I when P = $100, R = 40%, and T = 1 year.

Back

$40

Front

When using the simple interest formula, time needs to be entered in terms of ____?

Back

years

Front

Semi-Annually means how many times a year?

Back

2

Front

What does 'I' represent in the simple interest formula?

Back

interest money earned

Front

What is the formula for calculating Simple Interest?

Back

I = PRT (Interest = Principal x Rate x Time)

Front

If the principal is $200 and the interest earned is $30, what is the rate if the time is 2 years?

Back

7.5% (Rate = I / (P*T) = 30 / (200*2))

Front

What is Compound Interest?

Back

Interest calculated on the initial principal and also on the accumulated interest from previous periods.

Front

How do you convert an annual interest rate to a monthly interest rate?

Back

Divide the annual rate by 12.

Front

What is the difference between Simple Interest and Compound Interest?

Back

Simple Interest is calculated only on the principal, while Compound Interest is calculated on the principal plus any interest earned.