Simple Interest and Investment Concepts

The video tutorial explains how to calculate simple interest using the formula A = P + PRT, where A is the accrued value, P is the principal, R is the annual interest rate as a decimal, and T is the time in years. An example is provided where Sally buys a $1,000 savings bond with a 4% annual interest rate. The tutorial walks through the calculation to determine the bond's value after five years, resulting in an accrued value of $1,200.

What is the formula used to calculate simple interest?

• A = P * PRT

• A = P + PRT

• A = P / PRT

• A = P - PRT

In the simple interest formula, what does 'A' represent?

• The annual interest rate

• The time period in years

• The accrued value after time 't'

• The initial investment

What is the principal amount in Sally's savings bond investment?

• $2000

• $1500

• $1000

• $500

How is the annual interest rate expressed in the formula?

• As a percentage

• As a fraction

• As a decimal

• As a whole number

What is the value of 'r' in Sally's investment scenario?

• 0.4

• 0.04

• 0.004

• 4

For how many years is Sally's bond invested?

• 3 years

• 4 years

• 5 years

• 6 years

What is the total interest earned on Sally's bond after five years?

• $300

• $100

• $400

• $200

What is the final value of Sally's bond after five years?

• $1000

• $1200

• $1300

• $1100

What does the final value of the bond include?

• Only the initial investment

• Only the interest earned

• The initial investment plus interest earned

• None of the above