Simple Interest

Front

What is Simple Interest?

Back

Simple Interest is the interest calculated on the principal amount only, without compounding. It is calculated using the formula I = Prt, where I is the interest, P is the principal, r is the rate of interest, 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 = Prt.

Front

If you invest $500 at a simple interest rate of 5% for 4 years, how much interest will you earn?

Back

You will earn $100 in interest.

Front

What does 'P' represent in the simple interest formula I = Prt?

Back

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

Front

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

Back

'r' represents the Rate of interest, expressed as a decimal.

Front

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

Back

't' represents the Time in years for which the money is invested or borrowed.

Front

If the principal is $2000, the interest rate is 3%, and the time is 5 years, what is the interest?

Back

The interest is $300.

Front

What is the total amount after earning simple interest?

Back

The total amount is calculated as Total Amount = Principal + Interest.

Front

If you borrow $1,000 at a simple interest rate of 6% for 3 years, how much total will you pay back?

Back

You will pay back $1,180 in total.

Front

What is the difference between Simple Interest and Compound Interest?

Back

Simple Interest is calculated only on the principal amount, while Compound Interest is calculated on the principal plus any interest that has already been added.