Quiz 1.6: Calculating Simple and Compound Interest

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

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

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

• $7.50
• $26.25
• $87.5
• $262.50

Julie borrowed $3,500 for 3 years at 7½% simple interest rate. 
How much interest is that?

• Julie borrowed $3,500 for 3 years at 7½% simple interest rate. 
  How much interest is that?
• $787.50
• $810
• $812.50

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

• 4
• 8
• 12
• 16

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

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

Leroy borrowed $1500 at an annual simple interest rate of 12%.  He paid $270 in interest.  For what time period did Leroy borrow the money?

• 8 years
• 0.015 years
• 18 months
• 18 years

Principal = $800
Interest Rate = 3.5%
Time = 6 months
Find the simple interest earned.

• 14
• 140
• 168
• 16.80

Principal = $500
Interest earned in 4 years = $60.
Find the interest rate.

• 1%
• 2%
• 3%
• 4%

Jenna borrowed $5,000 for 3 years and had to pay $1,350 simple interest at the end of that time. What rate of interest did she pay?

• 6%
• 6%
• 8%
• 9%