Simple Interest

Grade 7 Math | Lesson ID: 07M0203002

30 minutesIntermediate
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What is Simple Interest?

Simple interest is money earned or paid on a principal amount over time. When you save money in a bank account, the bank pays you interest. When you borrow money, you pay interest to the lender.

Simple interest is calculated only on the principal amount, not on accumulated interest.

Understanding simple interest helps you make smart financial decisions about savings accounts, loans, and investments.