Simple Interest Practice

Front

What is the formula for calculating simple interest?

Back

I = P * r * t, where I is the interest, P is the principal, r is the rate, and t is the time in years.

Front

In the simple interest formula I = P * r * t, what does 'P' represent?

Back

P represents the principal, which is the initial amount of money invested or loaned.

Front

In the simple interest formula I = P * r * t, what does 'r' represent?

Back

r represents the rate of interest, usually expressed as a decimal.

Front

In the simple interest formula I = P * r * t, what does 't' represent?

Back

t represents the time the money is invested or borrowed, measured in years.

Front

How do you convert a decimal to a percentage?

Back

Multiply the decimal by 100 and add a percent sign (%).

Front

If you lend $240 and receive $270 back, how do you calculate the interest earned?

Back

Interest earned = Total amount paid back - Principal = $270 - $240 = $30.

Front

What is the formula to find the interest rate when you know the principal, interest earned, and time?

Back

r = I / (P * t), where I is the interest earned, P is the principal, and t is the time in years.

Front

If the principal is $2,000, the rate is 8%, and the time is 5 years, how much interest is earned?

Back

Interest earned = P * r * t = $2,000 * 0.08 * 5 = $800.

Front

What is the relationship between simple interest and time?

Back

The longer the time period, the more interest will be earned, assuming the principal and rate remain constant.

Front

How do you find the total amount to be paid back after borrowing money with simple interest?

Back

Total amount = Principal + Interest earned.