The image you've uploaded explains the
simple interest formula, which is:
$$
I = Prt
$$
Where:
- $ I $ = Interest earned (or paid)
- $ P $ = Principal (the initial amount of money)
- $ r $ = Rate of interest per time period (usually expressed as a decimal)
- $ t $ = Time the money is invested or borrowed for (in years)
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🔍 Explanation of the Formula
This formula calculates
simple interest, which means interest is only earned on the original principal, not on any previously accumulated interest.
#### Example:
Let’s say you deposit $1,000 in a bank account with an annual interest rate of 5% for 3 years.
- $ P = 1000 $
- $ r = 5\% = 0.05 $
- $ t = 3 $
Now plug into the formula:
$$
I = Prt = 1000 \times 0.05 \times 3 = 150
$$
So, the
interest earned over 3 years is
$150.
Total amount after 3 years = Principal + Interest = $1000 + $150 =
$1150
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✔ Key Points:
- Simple interest is
linear — it grows at a constant rate.
- It's commonly used for short-term loans or savings accounts.
- This is different from
compound interest, where interest is added to the principal periodically and earns interest on interest.
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📌 Summary:
The image teaches how to calculate
simple interest using the formula $ I = Prt $. You need to know the principal, interest rate (as a decimal), and time in years to find the interest.
Let me know if you'd like help solving a specific problem using this formula!
Parent Tip: Review the logic above to help your child master the concept of simple interest math worksheet.
