Simple Interest HW Assignment

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: Interest = Principal x Rate x Time.

Front

What is the formula for calculating Simple Interest?

Back

The formula for Simple Interest is: I = P x r x 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 you borrow $1,000 at a 5% simple interest rate for 3 years, how much interest will you pay?

Back

Interest = 1000 x 0.05 x 3 = $150.

Front

What is the total amount to be paid back if you borrow $1,000 at a 5% simple interest rate for 3 years?

Back

Total Amount = Principal + Interest = $1,000 + $150 = $1,150.

Front

How do you calculate the total amount paid back on a loan?

Back

Total Amount = Principal + Interest.

Front

What is the principal in a loan?

Back

The principal is the original sum of money borrowed or invested, before interest.

Front

What does the term 'rate' refer to in simple interest calculations?

Back

The rate refers to the percentage of interest charged on the principal amount, usually expressed as an annual rate.

Front

If a loan has a simple interest rate of 4% per year, how much interest will you earn on $2,000 after 5 years?

Back

Interest = 2000 x 0.04 x 5 = $400.

Front

What is the difference between simple interest and compound interest?

Back

Simple interest is calculated only on the principal amount, while compound interest is calculated on the principal plus any interest that has already been added.

Front

How much total will Stefan pay back after borrowing $8,950 at a 6.85% simple interest rate for 6 years?

Back

Total Amount = $8,950 + ($8,950 x 0.0685 x 6) = $12,628.45.