Simple Interest

Front

What is Simple Interest?

Back

Simple Interest is the interest calculated on the principal amount only, without compounding. It is calculated using the formula: I = P * r * t, where I is the interest, P is the principal, r is the rate, and t is the time.

Front

What does the formula I = P * r * t represent?

Back

This formula 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 (in decimal), and t is the time in years.

Front

How do you convert a percentage to a decimal?

Back

To convert a percentage to a decimal, divide the percentage by 100. For example, 18% becomes 0.18.

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What does 'P' stand for in the interest formula?

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'P' stands for Principal, which is the initial amount of money borrowed or invested.

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What does 'r' stand for in the interest formula?

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'r' stands for the rate of interest, which is the percentage of the principal charged as interest per year.

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What does 't' stand for in the interest formula?

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't' stands for time, which is the duration for which the money is borrowed or invested, measured in years.

Front

Calculate the simple interest on a loan of $750 at an 18% rate over 2 years.

Back

The simple interest is $270.

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If Emilio borrows $1200 at 8% simple interest for 2 years, how much will he pay back in total?

Back

Emilio will pay back $1392.

Front

Find the simple interest earned on a principal of $2000 at an 8% rate for 5 years.

Back

The simple interest earned is $800.

Front

What is the total amount to be paid back if the simple interest is added to the principal?

Back

Total Amount = Principal + Simple Interest.