Simple Interest Test Review

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: I = P * r * t, where I is the interest, P is the principal, r is the rate (as a decimal), and t is the time in years.

Front

What is the formula for calculating Simple Interest?

Back

The formula for calculating Simple Interest is: I = P * r * t.

Front

How do you convert a percentage to a decimal?

Back

To convert a percentage to a decimal, divide the percentage by 100. For example, 3% becomes 0.03.

Front

If you earn $10 in interest at a rate of 0.5% over 6 months, what was the principal amount?

Back

The principal amount was $4,000.

Front

How do you find the principal amount if you know the interest earned, rate, and time?

Back

Rearrange the Simple Interest formula: P = I / (r * t).

Front

What is the time period in years if you have 8 months?

Back

8 months is equivalent to 8/12 or 2/3 years.

Front

If you invest $650 at a yearly rate of 3%, how long will it take to earn $13 in interest?

Back

It will take 8 months.

Front

What is the interest rate if you earned $273.47 on a principal of $8,546.00?

Back

The interest rate is 3.2%.

Front

How do you calculate the interest earned over a period of time?

Back

Use the formula: I = P * r * t, substituting the values for P, r, and t.

Front

What is the Simple Interest earned on a principal of $12,800 at an 8% interest rate over 2 years?

Back

The Simple Interest earned is $2,048.00.