Simple interest is a type of interest where the amount of interest earned does not increase over time. It is used to determine how much money you need to pay or receive for a loan.
Understanding Simple Interest
Principal Amount: The original sum of money borrowed or invested in a financial product. Rate of Interest: The percentage rate at which interest is paid on a loan or investment. Length of Time: The amount of time for which the principal amount and rate of interest are applied.
Simple interest is the most basic form of interest and is used as the starting point for more complex forms of calculations. The concept of simple interest dates back to ancient Mesopotamia.
Draw / write: Why do we need simple interest?
Draw / write: What is the formula for calculating simple interest?