Lesson 7: Simple Interest

Property

The simple interest formula is $I = Prt$, where $I$ is the interest earned, $P$ is the principal (initial amount), $r$ is the annual interest rate (as a decimal), and $t$ is the time in years. To find the simple interest, substitute the given values for $P$, $r$, and $t$ into the formula and calculate.

Examples

Property

Solve simple interest word problems by setting up and solving equations using the formula $I = Prt$, where $I$ is interest, $P$ is principal, $r$ is rate, and $t$ is time.
To find an unknown variable, substitute the known values into the formula and solve the resulting equation.

Examples