Simple Interest

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

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

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

• Add 12 to the months

• divide the months by 12

• multiply 12 times the months

• You cannot change it to months.

Convert 18 months to years. 

• 18 Years

• 1.5 Years

• .18 Years

• You cannot change it to years.

The Principal and Interest are always___________.

• fraction

• decimal

• percent

• money

Write the percent as a decimal. 
4.3%

• 4.3

• .43

• .043

• 4300

What is 7.25% converted to a decimal?

• .725

• 0.725

• 0.0725

• 7.25

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

• 95

• 105

• 125

• 135

You borrowed 43,800 at a SIMPLE interest rate of 4.8%. If you pay it back in 2 years, how much interest is paid pack?

• $464,280

• $85,848

• $4204.8

• $48,004.80

Allison was left an inheritance from her Aunt Lisa. She can not touch the money until she is 21 years old, Allison is now 12 years old and inherited $50,000 that was put into an account with 2% interest. How much interest will Allison have earned at her 21st birthday?

• $900

• $100,000

• $9,000