Simple Interest + Old Stuff Review

What is the formula for simple interest?

• A=P(1+r)^t
• I=Prt
• I=P(1+r)t
• A=Prt

What does the P in I =PRT mean?

• Power

• Principal

• Product

• Percent

Question #5

In the formula I=P·R·T, what does r stand for in a loan?

A. Rate: the interest percentage you will pay on a loan

B. Ratio: the size of the interest interval compared to time

C. Return: how much money you end up earning

D. Reserves: how much money you have in the investment

• A

• B

• C

• D

The simple interest formula is I=Prt.  What does the t represent?

• Principle
• Interest
• Time, in hours
• Time, in years

Write the percent as a decimal. 
4.3%

• 4.3
• .43
• .043
• 4300

The rate is given as a percent (%).  Before using it in the simple interest formula, you must first convert it to a______.

• Fraction

• Decimal

• Ratio

• Dollar Amount

Dan borrowed $2,000 for 6 months at 12% annual simple interest rate. How much interest is that?

• $120
• $144
• $1,200
• $1,440

Find the simple interest earned for principal of $2,000 at and 8% rate for 5 years.

• $160

• $800

• $80,000

• $16

If you are calculating the simple interest and you are given the time in months.  How can you find the time in years?

• divide 12 by the months
• divide the months by 12
• multiply 12 times the months
• change the months to a decimal

Question #7

Ike invests $7,660 in an account paying 7.27% simple interest annually. How much interest has Ike gained after four years?

A. $222.75

B. $2,227.53

C. $1,392.20

D. $13,922.05

• A

• B

• C

• D