Mastering Simple Interest

Mr. Barnes

Simple Interest

What is Simple Interest

Simple interest is an interest charge that borrowers pay lenders for a loan.

Multiple Choice

What is simple interest ?

• The amount of money you start with

• The interest charge that borrowers pay lenders back.

• The time

How to Calculate simple interest

I=PRT

I = Interest

P= Principle ( Starting amount)

T= time ( years or months)

Multiple Choice

What is the principle referred to as ?

• The ending amount

• The starting amount

• The time

• The interest

Multiple Choice

What is the formula for calculating interest ?

• I=RTE

• I=PRT

• I=TRI

Steps to calculating Simple interest

1.Identify Principle (Starting amount
2. Identify your rate and change to a decimal

3. Identify your TIme.

4. Multiply (Principle X Rate X Time )

EXAMPLE

​Example: Elijah Borrows 500 dollars from the bank at a rate of 4% over a period of 3 years.

I= P X R X T

I=500 X .04 X 3

500x.04x3 = 60 ELIJAH HAS TO PAY BACK 60 DOLLARS IN INTEREST

Multiple Choice

Mr. Barnes takes out a loan in the amount of 1500 dollars. His Rate is 7% over a span of 3 years. How much will his interest be ?

• 315

• 215

• 300

• 330

Multiple Choice

How much will he pay back in total ?

• 1800

• 1815