Simple and compound interest formulas and personal finance math problems for a high school math course.
31 cards · basic cards · AI-written, checked twice. Edit anything.
- What is simple interest?
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Interest calculated only on the principal, not on accumulated interest- State the simple interest formula
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I = Prt (Interest equals Principal times rate times time)- In the simple interest formula, what does P represent?
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Principal, the initial amount of money borrowed or invested- In the simple interest formula, what does r represent?
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The annual interest rate, expressed as a decimal- In the simple interest formula, what does t represent?
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Time in years- What is the formula for total amount with simple interest?
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A = P + I or A = P(1 + rt)- What is compound interest?
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Interest earned on both principal and previously accumulated interest- State the compound interest formula
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A = P(1 + r/n)^(nt)- In the compound interest formula, what does n represent?
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Number of times interest is compounded per year- How does compounding frequency affect total interest earned?
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More frequent compounding results in more total interest- What is the effective annual rate (EAR)?
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The actual annual interest rate accounting for compounding periods- What is present value?
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The current amount of money needed to reach a future goal- What is future value?
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The value of an investment at a specified point in time- What does APR stand for?
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Annual Percentage Rate, the stated yearly interest rate- What does APY stand for?
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Annual Percentage Yield, the effective annual rate including compounding
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