Simple Interest

Front

What is Simple Interest?

Back

Simple Interest is a method of calculating the interest charge on a loan or the interest earned on an investment based on the original principal amount, the interest rate, and the time period.

Front

What is the formula for calculating Simple Interest?

Back

The formula for Simple Interest is I = P * r * t, where I is the interest, P is the principal amount, r is the rate of interest per year, and t is the time in years.

Front

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

Back

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

Front

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

Back

'r' represents the rate of interest, expressed as a decimal or percentage.

Front

What does 't' represent in the Simple Interest formula?

Back

't' represents the time the money is invested or borrowed, usually measured in years.

Front

If you invest $2000 at a simple interest rate of 5% for 3 years, how much interest will you earn?

Back

You will earn $300 in interest.

Front

How do you convert time from months to years in the Simple Interest formula?

Back

To convert time from months to years, divide the number of months by 12.

Front

If you have earned $400 in interest on a principal of $2000 at a rate of 5%, how long did the investment last?

Back

The investment lasted for 4 years.

Front

What is the total balance after earning simple interest?

Back

The total balance is calculated as Total Balance = Principal + Interest.

Front

If the principal is $1500, the rate is 8.25%, and the time is 18 years, what is the total balance?

Back

The total balance is $3727.50.