Simple interest

Front

What does the I stand for in the simple interest equation?

Back

Interest ($)

Front

What is the formula for simple interest?

Back

I = P*r*t

Front

What does the r stand for in the simple interest equation?

Back

Rate (% as decimal)

Front

Howard borrowed $4,000 from the bank at an interest rate of 8%. He has to pay it back in 2 years. How much interest will he pay?

Back

$640

Front

Amy deposits $200 in the bank for 5 years. She earns 5% interest. How much did she make in interest?

Back

$50

Front

What does P stand for in the simple interest formula?

Back

Principal (initial amount of money)

Front

What does t represent in the simple interest formula?

Back

Time (in years)

Front

If you invest $1,000 at a 6% interest rate for 3 years, how much interest will you earn?

Back

$180

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 earned.

Front

How do you convert a percentage to a decimal for the simple interest formula?

Back

Divide the percentage by 100.