Simple and Compound Interests

What is the formula for simple interest?

• A=P(1+r)^t
• I=Prt
• I=P(1+r)t
• A=Prt

What does the P in I =PRT mean?

• Power

• Principal

• Product

• Percent

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

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

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

Write the decimal as a percent. 
0.37

• 37%
• 3.7%
• .37%

9 months is how many years?

• .5
• .75
• .25

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

Find the simple interest earned for principal of $2,000 at and 8% rate for 5 years.

• $160

• $800

• $80,000

• $16

Mark took out a loan for $25,690 to purchase a new truck at a simple interest rate of 5.2%. How much interest will he pay on his truck after 5 years?

• $6,679.40

• $32,369.40

• $66,794

• $679.40

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