11
QuizMultiple Choice

Simple Interest

Question 11 • (Kapuschinsky)WCA 3424 Consumer Applications 1st nine weeks 26-27

In the formula I=P·r·t, what does r stand for?

Answer
A
Rate: the percent that interest is paid annually as a decimal
B
Ratio: the size of the interest interval compared to time
C
Return: how much money you end up earning
D
Reserves: how much money you have in the investment

Explanation

In the simple-interest formula I = P·r·t, r represents the interest rate per year, written as a decimal. For example, an annual rate of 5% is written as 0.05. Therefore, the correct choice is “Rate: the percent that interest is paid annually as a decimal.”

AI-written and checked against the verified answer.

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