Intrest

• What is simple interest?

  Amount earned on principal at fixed rate
• If you invest £200 at 4% for 3 years, which interest provides a greater return?

  Compound interest
• How does simple interest differ from compound interest?

  Simple interest is on principal only
• How do you calculate simple interest?

  Convert rate to decimal, multiply P, R, T
• What does the component $T$ represent in the formula $I =$$PRT$?


  Period in years
• What does the component $P$ represent in the formula $I =$$PRT$?


  Initial amount of money
• How is simple interest calculated?

  Principal × Rate × Time
• If you deposit £100 at 5% for 2 years, what is the simple interest?


  £10