Simple interest Online Quiz

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In the money related arithmetic, there are two types of interest rates that can be levied on the amount once it is borrowed from a person or institution. They are simple interest and compound interest. Of both, the simple interest or SI is relatively easy to calculate as it is consistent and comfortable to estimate. The SI can be found out based on the data such as the principal amount and the time with the help of formula. Here in this quiz, the child is given a rigorous practice by asking them to calculate the SI in different scenarios thus making it hassle-free learning.

Teaching simple interest to kids

Simple interest is a way to calculate the amount of money that you will earn or have to pay on a loan or an investment. It is called “simple” because it is based on a straightforward calculation that only uses the principal amount of money (the amount of money that you borrow or invest), the interest rate, and the length of time that the money is borrowed or invested.

Imagine that you have a savings account at a bank. The bank pays you interest on the money that you have in the account. The interest is a percentage of the principal, which is the amount of money that you have in the account. For example, if you have $100 in your savings account and the bank pays 1% interest per year, then you will earn $1 in interest each year.

Now, let’s say that you want to borrow some money from the bank. The bank will charge you interest on the loan. Just like with the savings account, the interest is a percentage of the principal, which is the amount of money that you borrow. For example, if you borrow $100 from the bank and the bank charges 5% interest per year, then you will have to pay $5 in interest each year.

The interest rate is the percentage of the principal that is charged or paid each year. It can be expressed as a decimal or as a percentage. For example, 5% can be written as 0.05 or 5.

To calculate the simple interest on a loan or an investment, you use the following formula:

Interest = Principal x Interest Rate x Time

For example, let’s say that you have a savings account with a principal of $1,000 and an interest rate of 2% per year. You want to know how much interest you will earn after 3 years. Using the formula above, you can calculate the interest like this:

Interest = $1,000 x 2% x 3 years = $60

So, after 3 years, you will earn $60 in interest on your $1,000 savings account.

It is important to note that simple interest is different from compound interest. With compound interest, the interest is calculated not only on the principal, but also on the accumulated interest from previous periods. This means that the more time goes by, the more interest you will earn (or have to pay). Compound interest can be more complex to calculate, but it can also result in a larger overall return on an investment or a higher cost on a loan.

In summary, simple interest is a way to calculate the amount of money that you will earn or have to pay on a loan or an investment based on the principal, the interest rate, and the length of time. It is important to understand how simple interest works, especially if you are considering borrowing or investing money.