Simple and Compound Interest

Front

The principal in an investment or loan is _________.

Back

the amount of money borrowed or deposited

Front

To earn as much interest as possible, you should open a savings account that earns ______ interest and has the _____ interest rate.

Back

compound ; highest

Front

How to convert time in months to years for simple interest calculation?

Back

Divide the months by 12.

Front

What is the formula for simple interest?

Back

I=Prt

Front

When calculating interest, the rate must be converted into a ____ before multiplying.

Back

decimal

Front

What does P stand for in I = Prt?

Back

principal

Front

A bank is offering 2.5% simple interest on a savings account. If you deposit $5,000, how much interest will you earn in three years?

Back

$375

Front

Sarah borrowed $18,000 for 4 years at an annual simple interest rate of 7%. What is the total amount she will repay for the car loan?

Back

$23040

Front

A bank is offering 7% annual compound interest on a savings account. If you deposit $1,500, what will be the total amount of money in your savings account after three years?

Back

$1837.56

Front

Kara borrowed $21,000 for 5½ years at an annual compound interest rate of 7.5% to buy a car. What is the total amount she will repay the bank for the auto loan?

Back

$31258.34