Simple Interest Review

Front

What is simple interest?

Back

Simple interest is a method of calculating the interest charge on a loan or financial product. It is calculated using the formula I = Prt, 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

What does the formula I = Prt represent?

Back

The formula I = Prt represents the calculation of simple interest, where I is the interest earned or paid, P is the principal amount, r is the annual interest rate (as a decimal), and t is the time in years.

Front

Convert 9 months into years.

Back

0.75 years.

Front

Calculate the simple interest for $1200 at 12% for 3 months.

Back

$36.

Front

What does 'r' stand for in the formula I = Prt?

Back

The 'r' in the formula I = Prt stands for 'rate', which is the annual interest rate expressed as a decimal.

Front

Convert 17% into a decimal.

Back

0.17.

Front

Find the simple interest for $421 at 4% for 9 years.

Back

$151.56.

Front

If the principal is $1000 and the rate is 5% for 2 years, what is the simple interest?

Back

$100.

Front

What is the principal in the formula I = Prt?

Back

The principal (P) is the initial amount of money that is either invested or borrowed.

Front

How do you convert a percentage to a decimal?

Back

To convert a percentage to a decimal, divide the percentage by 100.