Simple Interest Formula/Vocab
What does the letter R stand for in the Simple Interest formula?
The interest rate
Calculate interest on $2,000 at 7% p.a. for 4 years. (Correct to 2 decimal places)
Interest = $560.00
Cathy deposits $3600 at 5% per annum for 2 years. How much simple interest does she earn?
Interest = $360.00
If you invest $2,000 and earn $300 in simple interest over 3 years, what is the annual interest rate? (Write answer as a percentage).
HINT: R = I divided by P x T
Interest Rate = 5%
300 divided by 2000 x 3 = 0.05
What is 5 months in years? (2 decimal places)
0.42
What does the principal (P) mean in the Simple Interest formula?
The principal is the original amount of money you start with. It is either the amount borrowed or the amount invested.
Calculate interest on $5,000 at 3.75% p.a. for 5 years. (Correct to 2 decimal places)
Interest = $937.50
Over 3 years, Lucy invests $4588. The interest rate is 5.2% per annum. How much simple interest does she earn?
Interest = $715.73
Kade borrows $1,500 at an interest rate of 4% per annum. If he pays $240 in simple interest, how many years did he borrow the money for?
HINT: T = I divided by P x R
Time = 4 years
240 divided by 1500 x 0.04 = 4
What is 12.5% as a decimal?
0.125
What is the extra cost you pay to borrow money, or the extra cash you earn when you save money?
The interest
Calculate the monthly interest on $813 at 4.45% per month, for 9 months. (Correct to 2 decimal places)
Interest = $329.27
Kade invests $9200 over a 6 month period. The interest rate is 8% per annum. How much simple interest does he earn?
Interest = $368.00
Lucy earns $180 in simple interest over 3 years at a rate of 6% p.a. How much money did she originally invest?
HINT: P = I divided by R x T
P = $1000.00
What is 137% as a decimal?
1.37
What is the simple interest formula?
I = PRT
Calculate interest on $1,000 at 6% p.a. for 15 months. (Correct to 2 decimal places)
Interest = $75.00
You could have divided 6% by 12 or divided 15 by 12. You'll get the same answer.
Mark invests $1500 over a 21 month period. The interest rate is 4% per annum. What is the total amount he will end up with?
Total Amount = $1605.00
If I = $105, you add the interest to the principal (original amount).
Kye borrows $3,200 over an 18-month period and pays $275 in simple interest. What is the annual interest rate as a percentage? (Correct to 2 decimal places).
HINT: R = I divided by P x T
Interest Rate = 5.73%
Divide 18 months by 12 = 1.5
275 divided by 3200 x 1.5 = 0.05729...
What is 3.305% as a decimal?
0.03305
When rearranged, what is the simple interest formula to find R (the rate)?
R = I divided by P x T
Calculate interest on $4,500 at 12% p.a. for 309 days. (Correct to 2 decimal places)
Interest = $457.15
You could have divided 12% by 365 or divided 309 days by 365. You'll get the same answer.
Jemma invests $4000 at 6% p.a. for 5 years.
Alex invests $4000 at 4% p.a. for 7 years.
Who will have the higher amount of simple interest and by how much?
Jayda will have a higher interest by $80.00.
Sarah earns $95 in simple interest over 200 days. She originally started with $3800. What is the annual interest rate as a percentage? (Correct to 2 decimal places).
HINT: R = I divided by P x T
Interest Rate = 4.56%
Divide 200 days by 365 = 0.547...
95 divided by 3800 x 0.547... = 0.045625
What is 266 days in years? (2 decimal places)
0.73