Calculating Simple Interest: Principal, Rate, and Time

What is the formula for calculating simple interest?

• Interest = Principal x Rate x Time

• Interest = Principal + Rate + Time

• Interest = Principal - Rate - Time

• Interest = Principal / (Rate x Time)

If an investment earns $11.25 over 9 months at a rate of 5%, what is the principal amount?

• $200

• $250

• $300

• $350

How do you convert a rate from decimal to percentage?

• Multiply by 100

• Add 100

• Divide by 100

• Subtract 100

What is the correct way to express a time period of 9 months in terms of years for interest calculations?

• 0.9 years

• 0.75 years

• 1.08 years

• 1.5 years

If $300 is the principal and the interest earned is $11.25 at a rate of 5% over 9 months, what is the time in years?

• 0.25 years

• 1 year

• 0.5 years

• 0.75 years

What is the principal if $204 interest is earned in 3 years at a rate of 3.4%?

• $2500

• $2000

• $3000

• $1500

What is the rate if $204 is earned on a $2000 investment over 3 years?

• 4.4%

• 3.4%

• 5.4%

• 2.4%

How is the time calculated if the interest is $36, the rate is 6%, and the principal is $1200?

• 12 months

• 6 months

• 3 months

• 1 month

For a loan of $1200 that accrued $36 in interest at 6%, how long was the loan in months?

• 3 months

• 6 months

• 9 months

• 12 months

How do you convert a time period from years to months?

• Divide by 12

• Multiply by 12

• Multiply by 6

• Divide by 6