Simple Interest

Simple Interest

By Erika Miller

​Simple Interest

When you save money in the bank, they reward you with INTEREST

​

When you take out a loan, you pay an extra fee, INTEREST​

​Amount started with

​3 mo = 0.25 yrs

4 mo = 0.33 yrs

6 mo = 0.5 yrs​

8 mo = 0.66 or 0.67 yrs​

9 mo = 0.75 yrs

12 mo​ = 1 yr

​Amount started with

​Solving for Interest: Multiply P x R x T

​

RATE must be in decimal form

TIME must be in years ​

Multiple Choice

Principal = $500
Interest rate =5%
Time = 5 years
What is the interest earned?

• 95
• 105
• 125
• 135

Multiple Choice

Emilio borrows $1200 from a bank with 8% simple interest per year.  How much will he have to pay back total in 2 years?

• $150
• $192
• $1350
• $1392

Multiple Choice

Dan borrowed $2,000 for 6 months at 12% annual simple interest rate. How much interest is that?

• $120
• $144
• $1,200
• $1,440

Multiple Choice

Mr. Peterson wrote a check for $7,820 to pay off the interest on a loan which was given to him at a rate of 5% simple interest for 4 years. How much money did he originally borrow?

• $3,910

• $391

• $1,955

• $39,100

Multiple Choice

You lend $240 to your friend.  He pays you back $270 in 1 year.  What interest rate did you charge your friend?

• 88%
• 20%
• 12.5%
• 10%

Multiple Choice

Jaime wants to earn $500 in interest so she'll have enough to buy a used car. She puts $2,000 into an account that earns 2.5% interest. How long will she need to leave her money in the account to earn $500?

• 10 years

• 1 year

• 5 years

• .1 years