Unit 7 Review - Financial Literacy

What is the simple interest formula?

• I=rt
• I=prt
• I=bh
• I=Bh

The formula for Simple Interest is I=Prt. The P represents the principle. Principle is ...

• the starting amount of money borrowed or deposited

• the percent interest per year

• the amount of time you borrow money

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

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

• 4
• 8
• 12
• 16

Find the simple interest earned for principal of $2,000 at and 8% rate for 5 years.

• $160

• $800

• $80,000

• $16

Find the simple interest paid on a loan of $750 with an 18% rate over 2 years.

• $135

• $13,500

• $270

• $27,000

Kennedy won $3,000 from a radio contest. If she puts this money in a bank account that earns 2.9% simple interest, how much will she have in total in her account at the end of 10 years?

• $8700

• $38,700

• $870

• $3,870

How do you calculate the balance in an account, with interest?

• Subtract the interest from the principle amount
• Multiply the principle, rate and time
• Add the interest to the principle amount
• Add the principle amount and the time

Before the simple interest formula can be used, what form does the rate need to be in?

• decimal
• years
• percent
• months

Calculate the interest earned on a $4,500 savings account that earns 2.5% simple interest over three years.

• $338.00
• $33.80
• $33.75
• $337.50

Determine the balance on a $250 account that earns 3% simple interest over 7 years.

• $52.50
• $302.50
• $53.00
• $305.00