Simple Interest Dec 12

Front

What is the formula for simple interest?

Back

I = Prt, where I is the interest, P is the principal amount, r is the rate of interest per year, and t is the time in years.

Front

What does the 'r' represent in the formula I = Prt?

Back

The 'r' represents the rate of interest, expressed as a percentage.

Front

Calculate the simple interest for a principal of $800 at a rate of 5% for 2 years.

Back

$80

Front

Calculate the simple interest for a loan of $2000 at a rate of 6% for 4 years.

Back

$480

Front

If Reyna inherits $50,000 and earns 8.5% interest for 42 months, how much interest does she earn?

Back

$14,875

Front

What is the principal amount in the formula I = Prt?

Back

The principal amount (P) is the initial sum of money borrowed or invested.

Front

How do you convert an interest rate from a percentage to a decimal?

Back

Divide the percentage by 100. For example, 5% becomes 0.05.

Front

What is the time period (t) in the formula I = Prt?

Back

The time period (t) is the duration for which the money is borrowed or invested, measured in years.

Front

If the simple interest earned is $100, the principal is $1000, and the time is 2 years, what is the rate of interest?

Back

The rate of interest (r) is 5%.

Front

What happens to simple interest if the principal amount is doubled?

Back

The simple interest will also double, assuming the rate and time remain constant.