Simple 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

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

• $800

• $1,000

• $1,200

• $1,500

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

• Add 12 to the months
• divide the months by 12
• multiply 12 times the months
• You cannot change it to months.

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

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