Simple Interest #1

Principal = $2500

Interest Rate = 5%

Time = 3 years

What is the TOTAL amount paid back?

• $37.50

• $2875

• $375

• $2125

The simple interest formula is I=PRT.  What does the T represent?

• Principal

• Time, in hours

• Interest

• Time, in years

Danny borrows $1800 from a bank with 6% simple interest per year.  How much will he have to pay back IN TOTAL after 2 years?

• $216

• $1584

• $21.60

• $2016

When Betty was born, her parents put $8,000 into a college fund account that earned 9% simple interest. Find the amount of interest earned after 18 years.

• $720

• $1,080

• $20,960

• $12,960

Question #5

In the formula I=P·R·T, what does r stand for in a loan?

A. Rate: the interest percentage you will pay on a loan

B. Ratio: the size of the interest interval compared to time

C. Return: how much money you end up earning

D. Reserves: how much money you have in the investment

• A

• B

• C

• D

Question #6

Iris deposited $2325 into her savings to earn interest. Given that the investment yields 7.7% simple interest annually, how much interest did she accumilate after 38 months?

A. $387

B. $500

C. $567

D. $622

• A

• B

• C

• D

Question #7

Jesse invests $7,660 in an account paying 9.27% simple interest annually. How much interest has Jesse gained after four years?

A. $2422.75

B. $2,840.33

C. $2,640.53

D. $10,500.33

• A

• B

• C

• D

What does the P in I =PRT mean?

• Power

• Principal

• Product

• Percent

Dan borrowed $2,000 for 6 months at 12% annual simple interest rate. How much interest is that?

• $120
• $144
• $1,200
• $1,440

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

• divide 12 by the months
• divide the months by 12
• multiply 12 times the months
• change the months to a decimal