Intro to Calculating Simple Interest

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

• Principle
• Interest
• Time, in hours
• Time, in years

What does the "I" in the interest formula stand for?

• Principal
• Interest
• Rate
• Time

What does the "r" in the interest formula stand for?

• Principal
• Interest
• rate
• time

What does the "p" in the interest formula stand for?

• Principal
• Interest
• rate
• time

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

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

• 4
• 8
• 12
• 16

How much simple interest would be earned on a savings account of $4,500 at 5.5% interest per year after 24 months?

• $594,000

• $495

• $49,500

• $5,940

How much simple interest would be earned on a savings account of $8,000 at 4% interest per year after 36 months?

• $960

• $115,200

• $9,600

• $1,152,000

If the time is given in months, you must first _____________ by 12.

• add
• subtract
• multiply
• divide

Starting money = $350.
Interest rate = 2.5%
TIme = 3 years.
How much interest?

• $7.50
• $26.25
• $87.5
• $262.50