Unit 4: Simple Interest & Commission

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

How do you calculate Simple Interest?

Back

Simple Interest can be calculated using the formula: 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

What does the 'P' in the interest formula stand for?

Back

'P' stands for Principal, which is the initial amount of money invested or borrowed.

Front

What does the 'r' in the interest formula stand for?

Back

'r' stands for the rate of interest, which is the percentage of the principal charged as interest per time period.

Front

What does the 't' in the interest formula stand for?

Back

't' stands for time, which is the duration for which the money is invested or borrowed, usually measured in years.

Front

If you invest $8,000 at a 4% interest rate for 3 years, how much simple interest will you earn?

Back

You will earn $960 in simple interest.

Front

Emily’s parents put $1500 in her bank account at an 8.25% interest rate. What will be the balance after 18 years?

Back

The balance will be $3727.50.

Front

How do you calculate commission?

Back

Commission can be calculated using the formula: Commission = Total Sales × Commission Rate.

Front

Felipe earns 5% commission on $9,650 in sales. What is his commission?

Back

Felipe's commission is $482.50.

Front

Randy has a fixed salary of $2000 and earns 2% commission on $30,000 in sales. What is his total salary for the month?

Back

Randy's total salary for the month is $2,600.