Exploring Simple Interest Concepts

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

• Percentage

• Profit

• Principal

• Payment

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

• Divide by 100

• Subtract 0.01

• Multiply by 100

• Add 0.01

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

• Trend

• Time

• Transaction

• Total

What is the correct formula for calculating simple interest?

• I = PT/R

• I = PRT

• I = P + RT

• I = P/R + T

If Paul deposited $500 at a 3% interest rate for 5 years, how much interest does he earn?

• $75

• $750

• $15

• $150

What is the total balance in Paul's account after earning interest?

• $600

• $525

• $500

• $575

For how many years was Sara's $1,000 deposited if she earned $120 in simple interest at a rate of 2%?

• 3 years

• 6 years

• 5 years

• 4 years

Why should the simple interest always be less than the principal?

• Because the principal includes the interest

• Because interest rates are generally low

• Because the interest is paid upfront

• Because the principal decreases over time

What was the simple interest rate for Carter's account if he deposited $800 for 4 years and earned $160?

• 5%

• 3%

• 2%

• 4%

How much was Rebecca's initial loan if she owes $225 in simple interest after 5 years at a 3% rate?

• $750

• $1,000

• $1,500

• $2,250