Simple and Compound Interest

What is the simple interest formula?

• I= P•R•T

• I= R•T

• R=I•P•T

• P=I•R•T

What does "I" represent in the simple interest formula?

• rate

• principal

• interest money earned

• borrowed money

When using the simple interest formula, time needs to be entered in terms of ____?

• seconds

• years

• days

• months

The "principal" can be described as ______.

• the interest of the money collected

• the starting amount of money

• the time it took the money to grow

• the bank where money is invested

What is 8.25% in decimal form?

• 82.5

• 8.25

• 0.825

• 0.0825

Which of the following is not needed to calculate the simple interest?

• principal

• interest rate

• time

• term

How would you enter 3 months into the simple interest formula?

• 0.5

• 0.3

• 0.25

• 3

Solve for I when P = $100, R = 40%, and T = 1 year.

• $4,000

• $40

• $400

• $4

Which equation represents the simple interest you would earn on

$3400, with 7.5% interest after 18 months?

• I=3400(7.5)(18)

• I=3400(0.075)(1.5)

• I=3400(0.075)(18)

• I=3400(0.75)(1.5)

How long would it take to earn $600 simple interest on $4,000, with a rate of 5%?

• 3 months

• 133 months

• 120,000 days

• 3 years