Simple Interest Quiz

What is the formula used to calculate simple interest?

• I = P + R + T

• I = P * R * T

• I = P / R / T

• I = P - R - T

In the formula for simple interest, what does 'P' stand for?

• Profit

• Principal

• Percentage

• Period

How much interest does Arnold earn after 5 years with a principal of $700 and a rate of 6%?

• $210

• $42

• $35

• $420

What is the decimal equivalent of a 6% interest rate?

• 0.006

• 6.0

• 0.06

• 0.6

How much interest does Arnold earn in 6 months with a principal of $700 and a rate of 6%?

• $14

• $35

• $21

• $42

How is time represented in the simple interest formula?

• In years

• In days

• In months

• In weeks

Fred deposits $1,200 at a 5% interest rate. How much interest will he earn in 6 years?

• $720

• $600

• $360

• $300

What is the interest rate in Fred's savings account problem?

• 5%

• 4%

• 6%

• 7%

Zoe takes a $1,000 loan with a 4.5% interest rate. How much interest does she pay after 3 months?

• $22.50

• $45.00

• $11.25

• $33.75

How do you convert months into years for the simple interest formula?

• Add 12

• Divide by 12

• Multiply by 12

• Subtract 12