Simple Interest Practice

Front

What is simple interest?

Back

Simple interest is the interest calculated on the principal amount only, without compounding. It is typically calculated using the formula: I = P * R * T.

Front

What is the formula for calculating simple interest?

Back

The formula for calculating simple interest is I = P * R * T, where I is the interest, P is the principal amount, R is the rate of interest per year, and T is the time in years.

Front

If the principal amount is $500, the interest rate is 5%, and the time period is 3 years, what is the simple interest?

Back

The simple interest is $75.

Front

What is the time period if the principal amount is $1200, the interest rate is 10%, and the simple interest is $600?

Back

The time period is 5 years.

Front

What is the interest rate if the principal amount is $600, the simple interest is $90, and the time period is 3 years?

Back

The interest rate is 5%.

Front

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

Back

To convert a percentage interest rate to a decimal, divide the percentage by 100. For example, 5% becomes 0.05.

Front

What is the principal amount in a simple interest calculation?

Back

The principal amount is the initial sum of money that is invested or loaned, on which interest is calculated.

Front

If the principal amount is $400, the interest rate is 7%, and the time period is 2 years, what is the simple interest?

Back

The simple interest is $56.

Front

What happens to simple interest if the time period is doubled?

Back

If the time period is doubled, the simple interest will also double, assuming the principal and interest rate remain constant.

Front

What is the relationship between principal, interest rate, and time in simple interest calculations?

Back

In simple interest calculations, the interest earned is directly proportional to the principal amount, the interest rate, and the time period.