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 = P * r * t, 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 = P * r * t.

Tags

CCSS.7.RP.A.3

Front

If Maria borrowed $3,000 at a simple interest rate of 4% per year for 4 years, how much interest will she pay?

Back

I = P * r * t = 3000 * 0.04 * 4 = $480.

Tags

CCSS.7.RP.A.3

Front

How much will Maria repay after 4 years if she borrowed $3,000 at 4% simple interest?

Back

Total repayment = Principal + Interest = $3000 + $480 = $3480.

Tags

CCSS.7.RP.A.3

Front

What is the principal in the context of Simple Interest?

Back

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

Tags

CCSS.7.RP.A.3

Front

What does 'rate' mean in Simple Interest?

Back

The 'rate' is the percentage of the principal charged as interest per year.

Tags

CCSS.7.RP.A.3

Front

If the principal is $2,000 and the rate is 8% for 5 years, what is the Simple Interest earned?

Back

I = P * r * t = 2000 * 0.08 * 5 = $800.

Tags

CCSS.7.RP.A.3

Front

What is the total amount after earning Simple Interest on a principal of $2,000 at 8% for 5 years?

Back

Total amount = Principal + Interest = $2000 + $800 = $2800.

Tags

CCSS.7.RP.A.3

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 that has already been added.

Tags

CCSS.7.RP.A.3

Front

How do you convert a percentage to a decimal for calculations?

Back

To convert a percentage to a decimal, divide by 100. For example, 4% becomes 0.04.