Simple interest
Key notes:
i = prt
i is the interest earned
p is the principal (starting amount)
r is the interest rate expressed as a decimal
t is the time in years
i = prt
i is the interest earned
p is the principal (starting amount)
r is the interest rate expressed as a decimal
t is the time in years
To find the total amount in an account, calculate the interest and then add it to the principal.
Learn with an example
▶️ Peter has ₹80 in a savings account that earns 10% interest per year. The interest is not compounded. How much interest will he earn in 1 year?
Use the formula i = prt, where i is the interest earned, p is the principal (starting amount), r is the interest rate expressed as a decimal, and t is the time in years.
₹_____
Write the rate as a decimal.
10 % = 0.1
Calculate the interest earned.
i = prt
= ₹80 · 0.1 · 1
= ₹8
The interest will be ₹8.
▶️ Addison has ₹40 in a savings account that earns 5% interest per year. The interest is not compounded. How much interest will she earn in 1 year?
Use the formula i = prt, where i is the interest earned, p is the principal (starting amount), r is the interest rate expressed as a decimal, and t is the time in years.
₹______
Write the rate as a decimal.
5 % = 0.05
Calculate the interest earned.
i = prt
= ₹40 · 0.05 · 1
= ₹2
The interest will be ₹2.
▶️ Trevor has ₹20 in a savings account. The interest rate is 5% per year and is not compounded. How much will he have in total in 1 year?
Use the formula i = prt, where i is the interest earned, p is the principal (starting amount), r is the interest rate expressed as a decimal, and t is the time in years.
₹______
Write the rate as a decimal.
5 % = 0.05
Calculate the interest earned.
i = prt
= ₹20 · 0.05 · 1
= ₹1
Find the total amount by adding the interest to the principal.
₹1 + ₹20 = ₹21
The total amount will be ₹21.00.
Let’s practice! 🖊️
