Summary: Solving Simple Interest Applications

Key Concepts

• Simple interest
  • If an amount of money, $P$ , the principal, is invested for a period of $t$ years at an annual interest rate $r$ , the amount of interest, $I$ , earned is $I=Prt$
  • Interest earned according to this formula is called simple interest.

Glossary

simple interest

If an amount of money, $P$ , the principal, is invested for a period of $t$ years at an annual interest rate $r$ , the amount of interest, $I$ , earned is $I=Prt$ . Interest earned according to this formula is called simple interest.

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