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Simple Interest Flashcards
GCSE Mathematics (Edexcel) 1MA1
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Simple Interest
The interest calculated on the original principal amount only, not on accumulated interest.
Simple Interest Formula
Simple Interest = Principal × Rate × Time (S = P × R × T)
Principal
The original amount of money invested or borrowed.
Rate (in Simple Interest)
The percentage rate of interest per time period, expressed as a decimal in calculations.
Time (in Simple Interest)
The duration for which the money is invested or borrowed, usually in years.
Unit for Rate in Simple Interest
The rate is typically given as a percentage per year (e.g., 5% per annum).
Unit for Time in Simple Interest
Time is usually measured in years. If given in months, convert to years by dividing by 12.
How to calculate total amount with Simple Interest
Total Amount = Principal + Simple Interest.
Example: Find Simple Interest
If £500 is invested at 4% per year for 3 years, Simple Interest = 500 × 0.04 × 3 = £60.
Example: Find Total Amount
If £500 is invested at 4% per year for 3 years, Total Amount = Principal + Simple Interest = £500 + £60 = £560.
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