PA 4.6 Simple Interest

Front

What is Simple Interest?

Back

Simple Interest is the interest calculated only on the principal amount, or the original amount of money borrowed or invested.

Front

How do you calculate Simple Interest?

Back

Simple Interest (I) = Principal (P) × Rate (r) × Time (t).

Front

What is the formula to find the total amount after interest is added?

Back

Total Amount = Principal + Simple Interest.

Front

If you have $350 at an interest rate of 2.5% for 3 years, how much interest do you earn?

Back

$26.25.

Front

What is the principal amount in a simple interest problem?

Back

The principal amount is the initial sum of money that is either invested or borrowed.

Front

What does the interest rate represent?

Back

The interest rate represents the percentage of the principal that is paid as interest over a specific period.

Front

If you borrow $200 and pay $18 in interest after 18 months, what is the annual interest rate?

Back

6%.

Front

What is the time period in years if you have 18 months?

Back

1.5 years.

Front

How much will you have in total if you invest $500 at 12% for 6 months?

Back

$530.

Front

What is the total amount if you borrow $3,500 at a 7.5% interest rate for 3 years?

Back

$4,287.50.