Quiz 2.2.2 – Simply Tell the Total

Simply Tell the Total

Directions:

Use the simple interest formula to calculate the interest and the total amount to be repaid in one lump sum for the purchases below.

Simple Interest Rate Formula

I = P x R x T where:

I = interest

P = principal

R = interest rate (decimal number)

T = time (number of years)

  DescriptionPrincipal (P)Interest Rate (R)Time in Years (T)Interest (I)Total Amount to be Repaid
    Cash loan    $100    40.0%    1/2 year  $20 (100 x .4 x .5)  $120 ($100 + $20)
Big-screen TV     $700    7.0%    2 years
┬áCollege loan    $12,000    3.5%    15 years