# Lesson 8 homework practice financial literacy answer key

### Question:

How do you calculate simple interest?

### Answer:

Find, to the nearest cent, the simple interest paid on each loan, the interest rate, and the time. 6.9% of $2,500 for 6 months

Here’s how to get to the answer, which is $86.25:

In this particular question,

Principal=2500rupees

Time = half a year, or 6 months.

The rate of interest is 6.9%

Now,

Simple Interest=pxrxt=100

So,

Sl=2500*1*6.9+(100x2)

= 86.25rupees

Simple interest is interest that is only added to the original amount of money that was borrowed or deposited. To figure it out, you multiply the interest rate by the principal payment and then by the number of years. Simple interest doesn’t grow over time, so investments grow more slowly.