Simple Interest

Front

What is Simple Interest?

Back

Simple Interest is the interest calculated on the principal amount only, without compounding. It is calculated using the formula: Simple Interest = Principal × Rate × Time.

Front

What is the formula for calculating Simple Interest?

Back

The formula for calculating Simple Interest is: SI = P × R × T, where SI is Simple Interest, P is the principal amount, R is the rate of interest per year, and T is the time in years.

Front

If Maria borrowed $3,000 at a simple interest rate of 4% per year for 4 years, how much interest will she pay?

Back

$480

Front

How much will Maria have to repay after 4 years if she borrowed $3,000 at a simple interest rate of 4% per year?

Back

$3,480

Front

What is the interest earned on $2,000 borrowed for 6 months at a 12% annual simple interest rate?

Back

$120

Front

If John puts 14,000 Euros in an account at a simple interest rate of 1% per year, how much interest will he earn after 12 years?

Back

1,680 Euros

Front

What must you do if the time is given in months when calculating simple interest?

Back

You must divide the number of months by 12 to convert it to years.

Front

What is the principal amount in the context of simple interest?

Back

The principal amount is the initial sum of money borrowed or invested, before any interest is added.

Front

What does the rate in the simple interest formula represent?

Back

The rate represents the percentage of interest charged or earned per year on the principal amount.

Front

How does time affect simple interest?

Back

The longer the time period, the more interest will be accrued on the principal amount.