Simple Interest

Today we learned how to calculate Simple Interest.  Simple interest is easy to calculate.  You use the formula I=Prt where I stands for Interest, P = principal (the amount of money you start with), r = rate (the percentage of interest that is used on the money), and t = time (that amount of time the money is earning interest).

Example:  I = _____, P = $1500, r = 5%, t = 3 years

          I = Prt
          I = 1500 x 0.05 x 3
          I = $225

Example:  I = $500, P = $2100, r = _____ , t = 4 years

          I = Prt
          500 = 2100 x r x 4
          500 = 8400 r

           500  =   8400 r 
          8400       8400

             r = 0.059...
             r = 5.95%

Just plug the information in to the equation and solve.