Simple Interest

Simple Interest Formula (I=prt)

• I - interest

• p - principal

• r - rate

• t - time in years

Simple Interest Formula (I=prt)

• I - interest

• p - principal

• r - rate

• t - time in years

What does that mean?

The interest is the amount that the original amount has grown.

The principal is the original amount invested. (always in dollars)

The rate is the percent amount. (always written as decimal)

The time is the term for the investment. (always in years)

Multiple Choice

What does the I in the interest formula stand for?

• installment

• investment

• interest

Multiple Choice

What does the p in the interest formula stand for?

• principal

• payment

• percentage

Multiple Choice

What does the r in the interest formula stand for?

• repayment

• rate

• ratio

Multiple Choice

What does the t in the interest formula stand for?

• time

• taxes

• triathlon

Multiple Choice

The simple interest formula is I=Prt.  The P represents the principal.  The principal is ___________________.  

• the amount of money borrowed or deposited

• the percent interest for his year

• the amount taxed

• the amount the bank owes you for being a customer at their bank

Multiple Choice

The rate is given as a percent (%).  Before using it in the simple interest formula, you must first convert it to a______.

• fraction

• decimal

• ratio

• dollar amount

Multiple Choice

The Principal and Interest are always___________.

• fraction

• decimal

• percent

• money

Multiple Choice

Write the percent as a decimal. 
4.3%

• 4.3

• .43

• .043

• 4300

Multiple Choice

What is 7.25% converted to a decimal?

• .725

• 0.725

• 0.0725

• 7.25

Multiple Choice

Danielle borrows $2,500 from the bank at a 6% interest rate for 5 years. What is the equation to find her simple interest?

• I = 2,500 x 6 x 5

• I = 2,500 x 0.6 x 5

• I = 2,500 x 0.06 x 5

Multiple Choice

Danielle borrows $2,500 from the bank at a 6% interest rate for 5 years. How much interest did her investment gain?

• $750

• $7,500

• $75,000

Multiple Choice

Danielle borrows $2,500 from the bank at a 6% interest rate for 5 years. What is her new total after 5 years?

• $750

• $3,250

• $10,000

Multiple Choice

You borrowed 43,800 at a SIMPLE interest rate of 4.8%. If you pay it back in 2 years, how much interest is paid pack?

• $464,280

• $85,848

• $4204.8

• $48,004.80

Multiple Choice

Jude takes out a loan for $10,500 with a 7% interest rate for 3 years.

What is the equation to find his simple interest?

• I = 10,500 x 7 x 3

• I = 10,500 x 0.7 x 3

• I = 10,500 x 0.07 x 3

Multiple Choice

Jude takes out a loan for $10,500 with a 7% interest rate for 3 years.

What is the total amount of interest paid with the loan?

• $2,205

• $22,050

• $220,500

Multiple Choice

Jude takes out a loan for $10,500 with a 7% interest rate for 3 years.

What is the total amount that he has to pay back?

• $10,500

• $12,930

• $12,705

Multiple Choice

Christian opened a savings account with $3250. His account will earn 5.2% simple interest. How much money will be in his account after 6 years?

• $4,264.00

• $1,104.00

• $1,100.00

• $4,400.00