Intro to Interest

Simple Interest

Multiple Choice

The simple interest formula is I=Prt. The P represents the principle. The principle 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 simple interest formula is I=Prt.  What does the t represent?

• Principle
• Interest
• Time
• Percent Rate

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Multiple Choice

Jerry borrowed $4,000 for 5 years at 6% simple interest rate. How much interest is that?

• $800

• $1,000

• $1,200

• $1,500

Multiple Choice

Ann puts $300 in a bank account earning 4% interest. How much will she earn in interest in 1 year?

• 4

• 8

• 12

• 16

Multiple Choice

Starting money = $350.

Interest rate = 2.5%

Time = 3 years.

How much interest?

• $7.50

• $26.25

• $87.5

• $262.50

Multiple Choice

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

• 95
• 105
• 125
• 135

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Multiple Choice

If you are calculating the simple interest and you are given the time in months. How can you find the time in years?

• divide 12 by the months

• divide the months by 12

• multiply 12 times the months

• change the months to a decimal

Multiple Choice

Covert 18 months to years.

• 18 Years

• 1.5 Years

• .18 Years

• You cannot change it to years.

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

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Multiple Choice

Frank has earned $387 in interest over the past 36 months in his account. If the bank has a 1% interest rate, how much was the principal?

• $12,900

• $1,290

• $129,00

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Multiple Choice

Find the ending balance:

$35,600 at 9% for 2 years

• $42,296.39

• $42,002.27

• $42,008.00

• $38,804.00