Simple Interest Concepts

Front

Simple Interest is the amount of money charged on a loan or earned on an investment over time.

Back

Simple Interest

Front

Formula for Simple Interest

Back

I = P \times R \times T

Front

I in the simple interest formula

Back

Interest earned or paid (in dollars)

Front

P in the simple interest formula

Back

Principal amount (initial loan or investment)

Front

T in the simple interest formula

Back

Time (in years)

Front

Simple Interest vs. Compound Interest

Back

Simple interest is calculated on the principal only, while compound interest is calculated on the principal and accumulated interest.

Front

What is charged or earned in Simple Interest?

Back

Money on a loan or investment

Front

What does the variable I represent?

Back

Interest earned or paid

Front

What does the variable R represent?

Back

Interest rate

Front

What does the variable T represent?

Back

Time in years