Simple Interest

When you let the bank use your money by keeping it in a savings account, you will earn

• principal

• interest

• time

• rate

Interest =

• P x R x T

• T x P x R

• R x T x P

• All the above

Annual interest rate is the percent of the principal that you earn as interest based on

• 1 month

• 1 day

• 1 year

The principal is the amount of money that

• you put into the account on which interest is earned.

• you withdraw

• they bank pays you for letting them use your money

In the interest formula T stands for time in

• weeks

• days

• months

• years

When using the Simple Interest formula, if given time in months, you should

• divide the months by 12

• multiply the months by 12

• divide the months by 365

• divide the months by 4

Simple interest is

• interest paid on interest

• interest paid on the original principal

• better than compound interest

When using the Simple Interest formula, and given time in days you should

• divide the number of days by 12

• multiply the number of days by 365

• divide the number of days by 365

• divide the number of days by 7.

Matthew deposited $1600 into his savings account. His bank pays an annual interest rate of 5.2 %. Interest is calculated every 4 months. How much simple interest does he earn?

• $332.80

• $27.73

• $2773.33

• $110.92

Jasmine deposits $875.45 into a savings account that pay 3.25% annual interest rate. What is her simple interest after 3 years?

• $85.36

• $85.35

• $7.11

• $960.81