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.

Front

What is the formula for calculating Simple Interest?

Back

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

Front

If you invest $500 at a 4% interest rate for 3 years, how much simple interest will you earn?

Back

You will earn $60 in simple interest.

Front

How do you convert months into years when calculating simple interest?

Back

To convert months into years, divide the number of months by 12.

Front

If Jamie wants to earn $500 in simple interest with a deposit of $2,000 at 2.5% interest, how long will she need to invest her money?

Back

Jamie will need to invest her money for 10 years.

Front

What is the principal amount if $120 is paid in simple interest for 6 months at a 12% interest rate?

Back

The principal amount is $2,000.

Front

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

Back

'P' represents the principal amount, which is the initial amount of money invested or loaned.

Front

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

Back

'r' represents the rate of interest per year, expressed as a decimal.

Front

What does 't' represent in the simple interest formula?

Back

't' represents the time the money is invested or borrowed, measured in years.

Front

If an account balance at the end of 7 years is $601.60 from an investment of $470, what is the interest rate?

Back

The interest rate is 4%.