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 of interest per year, and t is the time in years.

Front

What does the 'P' in the simple interest formula I = Prt represent?

Back

The 'P' represents the principal, which is the initial amount of money borrowed or invested.

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, 43.5% becomes 0.435.

Front

What is the formula for calculating Simple Interest?

Back

The formula for calculating Simple Interest is I = P * r * t.

Front

If the principal is $1000, the rate is 5%, and the time is 3 years, what is the simple interest?

Back

The simple interest is I = 1000 * 0.05 * 3 = $150.

Front

What is the total amount to be paid back if the principal is $2000, the interest is $300, and the time is 2 years?

Back

The total amount to be paid back is $2000 (principal) + $300 (interest) = $2300.

Front

If you borrow $5000 at a simple interest rate of 4% for 4 years, how much interest will you pay?

Back

The interest paid will be I = 5000 * 0.04 * 4 = $800.

Front

What is the total amount after 5 years if the principal is $4000 and the simple interest is $600?

Back

The total amount after 5 years is $4000 (principal) + $600 (interest) = $4600.

Front

What does 'r' represent in the simple interest formula?

Back

The 'r' represents the rate of interest per year, expressed as a decimal.

Front

If the simple interest earned is $200 and the principal is $1000, what is the rate of interest?

Back

The rate of interest can be calculated as r = I / (P * t). Assuming t = 1 year, r = 200 / (1000 * 1) = 0.20 or 20%.