Simple Interest

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 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

Write the percent as a decimal. 
4.3%

• 4.3
• .43
• .043
• 4300

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

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

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

9 months is how many years?

• .5
• .75
• .25

Question #7

Ike invests $7,660 in an account paying 7.27% simple interest annually. How much interest has Ike gained after four years?

A. $222.75

B. $2,227.53

C. $1,392.20

D. $13,922.05

• A

• B

• C

• D

Find the simple interest:
Principal: $6,000
Interest Rate: 5%
Time: 6 months

• $150
• $1,800
• $1,500
• $15,000