Simple Interest (notes)

Simple Interest

Simple Interest - earnings paid on a FIXED amount of money or principal.

​FORMULA:

​I = Prt

(I = P × r × t)

​I-Interest (earned)

​P-Principal (starting amount of money)

​t- Time (in years)

​r- Rate %(as a decimal)

Ex.1) ​Find the simple interest and the total amount in the account:

• P = $1,800

• r = 5%

• t = 1 year

​

​I = Prt

​Ex. 4) Ben deposited $6,500 in a simple interest account that pays 2.8% interest annually. If Ben leaves the money in the account for 12 years, how much interest will he earn?

• P =

• r =

• t =

​

​I = Prt

​Ex. 5) Gonzalo has $1360 in a savings account that earns 2.5% interest per year. The interest is not compounded. How much interest will he earn in 10 years?

• P =

• r =

• t =

​

​I = Prt