Simple Interest Practice

How do you convert a percentage to a decimal?

• Multiply the percentage by 100

• Add 100 to the percentage

• Divide the percentage by 100

• Subtract 100 from the percentage

What does 'r' stand for in the simple interest formula?

• Rate of return

• Rate of interest

• Risk factor

• Revenue

What happens to the simple interest if the time period is doubled?

• The simple interest will triple.

• The simple interest will remain the same.

• The simple interest will also double, assuming the principal and rate remain the same.

• The simple interest will decrease by half.

If you take out a loan of $8,000 at a 5% interest rate for 3 years, how much total will you pay back?

• $8,000

• $9,000

• $9,200

• $10,000

What is the effect of a higher interest rate on simple interest?

• A higher interest rate decreases the amount of interest earned or paid.

• A higher interest rate has no effect on the amount of interest earned or paid.

• A higher interest rate increases the amount of interest earned or paid.

• A higher interest rate only affects compound interest, not simple interest.

What is simple interest?

• Interest calculated on the total amount including interest earned

• Interest calculated only on the principal amount, or the original amount of money

• Interest that varies based on the market rate

• Interest that is compounded annually

If you have a principal of $500 and an interest rate of 10% for 1 year, what is the interest?

• $30

• $50

• $70

• $100

What does 'P' represent in the simple interest formula?

• The total interest earned

• The principal, which is the amount of money borrowed or deposited.

• The rate of interest applied

• The time period for which the money is borrowed

What is the time period 't' in the simple interest formula?

• t is the time in years for which the money is borrowed or invested.

• t is the total amount of interest paid over the loan period.

• t is the principal amount borrowed or invested.

• t is the rate of interest expressed as a percentage.

If Jenna borrowed $5,000 and paid $1,350 in interest over 3 years, what was her interest rate?

• 5%

• 7%

• 9%

• 11%