Simple Interest

Front

What is Simple Interest?

Back

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

Front

What is the formula for calculating Simple Interest?

Back

The formula for Simple Interest is: Interest = Principal × Rate × Time.

Front

If the Principal is $800, the Interest Rate is 3.5%, and the Time is 6 months, what is the interest earned?

Back

The interest earned is $14.

Front

How do you convert a percentage to a decimal?

Back

To convert a percentage to a decimal, divide the percentage by 100. For example, 7.25% = 7.25 ÷ 100 = 0.0725.

Front

What is the interest earned on $350 at an interest rate of 2.5% over 3 years?

Back

The interest earned is $26.25.

Front

If a credit card balance is $1,583 and the interest rate is 8.8%, how much interest will be owed after 3 years?

Back

The interest owed after 3 years is $417.91.

Front

What is the interest earned on $300 at a 4% interest rate after 1 year?

Back

The interest earned is $12.

Front

What does 'Principal' mean in the context of Simple Interest?

Back

Principal is the initial amount of money that is invested or loaned, before any interest is added.

Front

What does 'Rate' refer to in Simple Interest calculations?

Back

Rate refers to the percentage of interest charged or earned on the principal, usually expressed annually.

Front

What does 'Time' represent in the Simple Interest formula?

Back

Time represents the duration for which the money is invested or borrowed, typically measured in years.