Calculating Interest: Key Concepts and Techniques

What is one reason people might need to borrow money?

• To buy groceries

• To buy a movie ticket

• To go on vacation

• For medical expenses

What do you earn by saving money in a bank?

• Points

• Gifts

• Interest

• Discounts

What is the principal in the context of banking?

• The initial amount of money

• The total debt

• A type of bank account

• The interest rate

How is the interest rate expressed in calculations?

• As a percentage

• As a fraction

• As a decimal

• As a whole number

Using the formula I = PRT, what does 'T' stand for?

• Time

• Transaction

• Trade

• Total

If you save $200 at an interest rate of 15% per year, how much interest will you earn in one year?

• $30

• $20

• $15

• $25

What would be the total amount in savings after earning interest for 5 years on $200 at a rate of 15% per year?

• $400

• $250

• $300

• $350

If you borrowed $200 at a 15% annual interest rate, how much extra would you owe after one year?

• $30

• $25

• $20

• $35

What is the total amount you would have to pay back after 5 years if you borrowed $200 at a 15% interest rate?

• $350

• $300

• $400

• $450

Why is it important to understand how to calculate interest?

• To manage debts and savings effectively

• To understand global economics

• To calculate taxes

• To invest in stocks