CW - Lesson 3.1 Practice

Front

What is the formula for calculating simple interest?

Back

Simple Interest = Principal x Rate x Time

Front

If you invest $350 at an interest rate of 2.5% for 3 years, how much interest will you earn?

Back

$26.25

Front

Scott took out a 72 month loan for $35,000 and paid $8,925 in simple interest. What was the interest rate?

Back

4.25%

Front

What type of retirement account is specifically used by teachers, nurses, and nonprofit workers?

Back

403b

Front

Calculate the simple interest earned on a principal of $500 at a rate of 10% held for 8 months.

Back

$33.50

Front

Define 'Principal' in the context of loans and interest.

Back

Principal is the original sum of money borrowed or invested, excluding any interest.

Front

What does 'Rate' refer to in financial terms?

Back

Rate refers to the percentage at which interest is charged or paid on a principal.

Front

Explain the term 'Time' in the context of calculating interest.

Back

Time refers to the duration for which the money is borrowed or invested, usually expressed in years.

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 accumulated interest.

Front

How do you convert an annual interest rate to a monthly interest rate?

Back

Divide the annual interest rate by 12.