Simple and Compound Interest

Front

What does the 't' represent in the simple interest formula I=Prt?

Back

Time, in years.

Front

Which is the compound interest formula?

Back

A = P(1+r)^t

Front

Calculate the simple interest for Principal = $350, Interest rate = 2.5%, Time = 3 years.

Back

$26.25

Front

What does 'A' represent in the compound interest formula A = P(1 + r)^t?

Back

The total amount of money after a certain amount of time.

Front

If Beyonce takes a loan of $6500 at a simple interest rate of 8% for 5 years, what is the total amount she will pay?

Back

$9100.

Front

What is the formula for calculating simple interest?

Back

I = Prt.

Front

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

Back

Principal amount.

Front

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

Back

Interest rate (as a decimal).

Front

How do you convert a percentage to a decimal?

Back

Divide the percentage by 100.

Front

What is the difference between simple interest and compound interest?

Back

Simple interest is calculated only on the principal, while compound interest is calculated on the principal plus any interest earned.