Simple Interest Review

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What is Simple Interest?

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Simple Interest is the interest calculated on the principal amount only, without compounding. It is calculated using the formula: SI = P * r * t, where P is the principal, r is the rate of interest, and t is the time in years.

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How do you calculate Simple Interest?

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To calculate Simple Interest, use the formula: SI = P * r * t. For example, if P = $2000, r = 8% (0.08), and t = 5 years, then SI = 2000 * 0.08 * 5 = $800.

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What is the formula to find the total amount after interest is added?

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The total amount (A) after interest is added can be calculated using the formula: A = P + SI, where SI is the Simple Interest.

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If you invest $270 at a 12% interest rate for 10 years, what is the Simple Interest earned?

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Using the formula SI = P * r * t, SI = 270 * 0.12 * 10 = $324.

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What is the total amount after 10 years if you invest $270 at 12% interest?

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Total amount A = P + SI = 270 + 324 = $594.

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

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

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

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Rate refers to the percentage of interest charged or earned on the principal amount, usually expressed as an annual rate.

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

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

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How much will Maria repay after borrowing $3,000 at 4% for 4 years?

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Total repayment = Principal + Simple Interest = 3000 + (3000 * 0.04 * 4) = $3480.

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What is a discount?

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A discount is a reduction in the price of an item, often expressed as a percentage of the original price.