Simple Interest

Front

What is Simple Interest?

Back

Simple Interest is the interest calculated on the principal amount only, without compounding. It is given by the formula I = PRT, where I is the interest, P is the principal, R is the rate of interest per year, and T is the time in years.

Tags

CCSS.7.RP.A.3

Front

What is the formula for calculating Simple Interest?

Back

The formula for calculating Simple Interest is I = PRT.

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CCSS.7.RP.A.3

Front

If the principal is $10,000, the rate is 7%, and the time is 20 years, what is the interest?

Back

The interest is $14,000.

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CCSS.7.RP.A.3

Front

How do you calculate the total amount to be paid back after borrowing money with Simple Interest?

Back

Total Amount = Principal + Interest.

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CCSS.7.RP.A.3

Front

If Emilio borrows $1,200 at 8% interest for 2 years, how much will he pay back in total?

Back

He will pay back $1,392.

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CCSS.7.RP.A.3

Front

What is the principal in a Simple Interest calculation?

Back

The principal is the initial amount of money that is invested or borrowed.

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CCSS.7.RP.A.3

Front

What does the rate in Simple Interest represent?

Back

The rate represents the percentage of interest charged or earned per year.

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CCSS.7.RP.A.3

Front

If Anna invests $2,500 at 5% interest, how long will it take to earn $1,125 in interest?

Back

It will take 9 years.

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CCSS.6.EE.B.7

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How much interest will Ann earn in 1 year if she puts $300 in a bank account earning 4% interest?

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She will earn $12.

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CCSS.7.RP.A.3

Front

What is the relationship between time and interest in Simple Interest?

Back

The interest earned increases with time, as it is directly proportional to the time period.

Tags

CCSS.6.EE.B.6