Simple Interest Practice

Front

What is the formula for calculating simple interest?

Back

I = P * r * t, where I is the interest, P is the principal, r is the rate (as a decimal), and t is the time in years.

Front

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

Back

P represents the principal, which is the amount of money borrowed or deposited.

Front

How do you convert a percentage to a decimal?

Back

To convert a percentage to a decimal, divide the percentage by 100.

Front

If Jenna borrowed $5,000 and paid $1,350 in interest over 3 years, what was her interest rate?

Back

9%.

Front

What does 'r' stand for in the simple interest formula?

Back

r stands for the rate of interest.

Front

If you take out a loan of $8,000 at a 5% interest rate for 3 years, how much total will you pay back?

Back

$9,200.

Front

What is simple interest?

Back

Simple interest is the interest calculated only on the principal amount, or the original amount of money.

Front

What is the time period 't' in the simple interest formula?

Back

t is the time in years for which the money is borrowed or invested.

Front

What is the relationship between principal, rate, and interest in simple interest?

Back

The interest earned is directly proportional to the principal amount and the rate of interest.

Front

If the principal is $1,000 and the rate is 5% for 2 years, what is the simple interest?

Back

$100.