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: Interest = Principal x Rate x Time.

Front

What is the formula for calculating Simple Interest?

Back

The formula for Simple Interest is: Interest = Principal x Rate x Time.

Front

If the Principal is $500, the Rate is 5%, and the Time is 5 years, what is the interest earned?

Back

$125

Front

Dan borrowed $2,000 for 6 months at a 12% annual simple interest rate. How much interest is that?

Back

$120

Front

Convert 5% to a decimal.

Back

.05

Front

Tina invested $2,000 in a simple interest account at an 8% rate for 5 years. What is the interest earned?

Back

$800

Front

What is the relationship between Principal, Rate, and Time in Simple Interest?

Back

The interest earned is directly proportional to the Principal, Rate, and Time.

Front

If Jenna borrowed $5,000 for 3 years and paid $1,350 in simple interest, what was her interest rate?

Back

9%.

Front

What does 'Principal' mean in the context of Simple Interest?

Back

Principal is the initial amount of money that is invested or borrowed.

Front

What does 'Rate' refer to in Simple Interest calculations?

Back

Rate refers to the percentage of interest charged or earned on the principal amount, usually expressed annually.