Exploring Simple and Compound Interest Concepts

The video tutorial explains simple and compound interest, focusing on the formula I = PRT for simple interest, where P is the principal, R is the rate, and T is the time. It covers how to convert percentages to decimals, solve for different variables in the formula, and introduces compound interest with examples. The tutorial provides practical examples to illustrate these concepts, helping learners understand how to calculate interest in various scenarios.

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

• Percentage rate

• Profit earned

• Principal amount

• Payment due

How do you convert a percentage to a decimal for use in interest calculations?

• Multiply by 100

• Divide by 100

• Add 0.01

• Subtract 0.01

What is the formula for calculating simple interest?

• I = P - RT

• I = PRT

• I = P + RT

• I = P/R + T

What is the decimal equivalent of 3 months when calculating time for interest?

• 3

• 0.03

• 0.3

• 0.25

If Josh borrows $250 at a 3% annual interest rate, how much interest will he pay in one year?

• $750

• $7.50

• $75

• $25

To find the principal when you know the interest, rate, and time, you should:

• Add rate to time

• Divide interest by the product of rate and time

• Multiply rate by time

• Subtract interest from rate

If a loan of $1,000 is repaid with $150 interest after 3 years, what was the annual interest rate?

• 15%

• 5%

• 1.5%

• 50%

To convert an interest rate from a decimal to a percentage, you should:

• Subtract 100

• Add 100

• Divide by 100

• Multiply by 100

What does 'n' represent in the compound interest formula?

• Number of years

• Nominal interest rate

• Net interest

• Number of compounding periods per year

Jackie deposits $325 in an account with a 4.1% interest rate compounded annually. How much will she have after 3 years?

• $366.64

• $325

• $400

• $350