7.RP.3 Simple Interest

Front

What is Simple Interest?

Back

Simple Interest is the interest calculated on the principal amount only, without compounding. It can be 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 loan of $1,000 is taken at an interest rate of 5% for 3 years, what is the Simple Interest?

Back

The Simple Interest is $150. (SI = 1000 × 0.05 × 3 = $150)

Front

How do you calculate the total amount to be repaid on a loan with Simple Interest?

Back

Total Amount = Principal + Simple Interest.

Front

What is the total amount to be repaid if the principal is $2,000, the interest rate is 4%, and the time is 5 years?

Back

The total amount to be repaid is $2,400. (SI = 2000 × 0.04 × 5 = $400; Total Amount = 2000 + 400 = $2400)

Front

What is the annual interest rate if $120 interest is earned on a $1,500 deposit over 2 years?

Back

The annual interest rate is 4%. (SI = 1500 × r × 2; 120 = 300r; r = 0.04 or 4%)

Front

If you earn $50 in interest from a $1,000 investment over 1 year, what is the interest rate?

Back

The interest rate is 5%. (SI = 1000 × r × 1; 50 = 1000r; r = 0.05 or 5%)

Front

What is the principal amount if the Simple Interest earned is $200 at a rate of 10% over 4 years?

Back

The principal amount is $500. (SI = P × 0.10 × 4; 200 = 4P; P = 50)

Front

How much interest will be earned on a $800 deposit at a 3% interest rate over 5 years?

Back

The interest earned will be $120. (SI = 800 × 0.03 × 5 = $120)

Front

What is the total amount in the account after 3 years if $1,200 is deposited at a 6% interest rate?

Back

The total amount in the account will be $1,440. (SI = 1200 × 0.06 × 3 = $216; Total Amount = 1200 + 216 = $1416)