Simple Interest

Front

What does the simple interest formula I=Prt represent?

Back

I = Interest, P = Principal amount, r = Rate of interest (as a decimal), t = Time (in years)

Front

What does the 't' in the simple interest formula I=Prt represent?

Back

Time, in years

Front

True or False: Before you can calculate interest, your time must be in MONTHS!

Back

FALSE

Front

How do you convert a percentage to a decimal?

Back

Divide the percentage by 100.

Front

Convert 5% to a decimal.

Back

0.05

Front

What does the 'I' in the interest formula stand for?

Back

Interest

Front

Convert 4.3% to a decimal.

Back

0.043

Front

What is the formula for calculating simple interest?

Back

I = Prt

Front

If you invest $1000 at a rate of 5% for 3 years, what is the simple interest earned?

Back

I = 1000 * 0.05 * 3 = $150

Front

What is the principal in the simple interest formula?

Back

The principal is the initial amount of money invested or borrowed.