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: Simple Interest = Principal × Rate × Time.

Front

What is the formula for calculating Simple Interest?

Back

The formula for calculating Simple Interest is: SI = P × R × T, where SI is Simple Interest, P is the principal amount, R is the rate of interest (in decimal), and T is the time (in years).

Front

If a customer deposits $1,500 at an interest rate of 3% for 5 years, how much interest will they earn?

Back

Interest = 1500 × 0.03 × 5 = $225.

Front

What is the total amount in the account after earning Simple Interest?

Back

Total Amount = Principal + Simple Interest.

Front

If Elena borrows $2,000 at 5% for 3 years, how much interest does she pay?

Back

Interest = 2000 × 0.05 × 3 = $300.

Front

How do you calculate the total repayment amount for a loan?

Back

Total Repayment = Principal + Interest.

Front

What is the interest earned on $90 at 5% for 1 year?

Back

Interest = 90 × 0.05 × 1 = $4.50.

Front

How much will Dayton have in his account after 1 year if he starts with $90 and earns 5% interest?

Back

Total Amount = 90 + 4.50 = $94.50.

Front

If Jane's dad takes a loan of $2,500 at 9% for 7 months, how do you calculate the interest?

Back

Convert 7 months to years: 7/12. Then, Interest = 2500 × 0.09 × (7/12) = $131.25.

Front

What is the difference between Simple Interest and Compound Interest?

Back

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