Simple Interest and Percentage Calculations

The video tutorial explains how to calculate the annual simple interest rate when a friend borrows $500 and agrees to pay back $520 in one month. It uses the simple interest formula I = p * r * t, where I is the interest, p is the principal, r is the rate, and t is the time in years. The tutorial walks through the steps of identifying the principal, calculating the interest, converting time to years, and solving for the interest rate. The final interest rate is expressed as a percentage, which is found to be 48%.

What is the principal amount in the given problem?

• $500

• $480

• $520

• $20

How much interest is paid in one month?

• $500

• $520

• $50

• $20

What is the time period expressed in years for the calculation?

• 1 year

• 12 months

• 1/12 year

• 1 month

Which formula is used to calculate simple interest?

• I = p + r + t

• I = p * r * t

• I = p / r / t

• I = p - r - t

Why is it necessary to express the time in years for the simple interest formula?

• To match the principal

• To avoid fractions

• To make calculations easier

• Because the interest rate is annual

What is the simplified form of the fraction 500/12?

• 200/3

• 125/3

• 100/3

• 150/3

What is the reciprocal of 125/3 used in the calculation?

• 1/125

• 125/3

• 3/500

• 3/125

What is the simplified form of the interest rate before converting to a percentage?

• 3/5

• 1/2

• 48/100

• 12/25

How do you convert a fraction to a percentage?

• Divide by 100

• Multiply by 100

• Add 100

• Subtract 100

What is the final annual simple interest rate in percentage?

• 45%

• 50%

• 40%

• 48%