Simple interest

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What does the I stand for in the simple interest equation?

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Interest ($)

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CCSS.7.EE.B.4A

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What is the formula for simple interest?

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I = P*r*t

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CCSS.7.RP.A.3

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What does the r stand for in the simple interest equation?

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Rate (% as decimal)

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CCSS.6.EE.B.7

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Howard borrowed $4,000 from the bank at an interest rate of 8%. He has to pay it back in 2 years. How much interest will he pay?

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$640

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CCSS.7.RP.A.3

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Amy deposits $200 in the bank for 5 years. She earns 5% interest. How much did she make in interest?

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$50

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CCSS.HSF.BF.A.2

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What does P stand for in the simple interest formula?

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Principal (initial amount of money)

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CCSS.8.EE.C.7B

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What does t represent in the simple interest formula?

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Time (in years)

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CCSS.7.EE.B.4A

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If you invest $1,000 at a 6% interest rate for 3 years, how much interest will you earn?

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$180

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CCSS.7.RP.A.3

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What is the difference between simple interest and compound interest?

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Simple interest is calculated only on the principal amount, while compound interest is calculated on the principal plus any interest earned.

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CCSS.7.RP.A.3

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How do you convert a percentage to a decimal for the simple interest formula?

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Divide the percentage by 100.