8.4 Simple Interest

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

• It

• Interest

• the Headless Iron Man

• Ignoramus

The simple interest formula is I=Prt. The P represents the principal. The principal is ___________________.

• the amount of money

• the percent interest for his year

• the rate

• the percent proportion

What is the formula for simple interest?

• T = pri

• I = prt

• R = ipt

• P = irt

Joseph goes tot he bank and borrows $10,000 for a new car. The bank approves him for a 3-year loan at an interest rate of 4.25%. According to Joseph's loan information, look at the simple interest formula and place the numbers given in the correct location.

• p

• 10,000

• I =

• 4.25%/100

• r

• 1,275

• t

• 3

Tags

8.4 Consumer Applications

Ivan deposits $5,000 into an account that pays simple interest at a rate of 5% per year. How much interest will he be paid in the first 3 years?

What is the principle? ​ (a)  

What is the rate? ​ (b)  

What is the time? ​ (c)  

• $5,000
• 5%/100
• 3 years

• $300
• 6%/100
• 5 years

Principal = $500
Interest rate =5%
Time = 5 years
What is the interest earned?

• 95
• 105
• 125
• 135

Alexton the Skeleton borrowed $4,000 for 5 years at 6% simple interest rate to pay for his band equipment. How much interest is that?

• $800

• $1,000

• $1,200

• $1,500

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

• 4

• 8

• 12

• 16

Ashira has $1000 in her savings account. The interest rate is 2.5%. How much interest will Ashira earn when her money has been in the bank for 3 years?

• $750

• $7.50

• $1,075

• $75

Tags

8.4 Consumer Applications