R Review for Flashcard 4-3

Front

What does the 'P' in the simple interest formula I=Prt represent?

Back

The amount of money borrowed or deposited.

Front

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

Back

Time.

Front

How do you calculate the interest rate if you know the principal, interest, and time?

Back

Interest Rate = (Interest / (Principal * Time)) * 100.

Front

If the principal is $4,900 and the interest earned is $191.10 over 1.5 years, what is the interest rate?

Back

2.6%.

Front

What must you convert the interest rate to before using it in the simple interest formula?

Back

Decimal.

Front

What is the formula for calculating simple interest?

Back

I = Prt, where I is interest, P is principal, r is rate, and t is time.

Front

If Frank earned $387 in interest over 36 months at a 1% interest rate, what was his principal?

Back

$12,900.

Front

What is the relationship between principal, interest, rate, and time in the context of simple interest?

Back

Interest is directly proportional to principal and time, and directly related to the rate.

Front

How do you convert a percentage to a decimal?

Back

Divide the percentage by 100.

Front

What is the significance of the time variable in the simple interest formula?

Back

It represents the duration for which the money is borrowed or invested.