How to Calculate Simple Interest for GED Math

Understanding Simple Interest

• 🎯 Simple interest problems are frequently found on the GED math exam.
• 💡 To solve these, you need the formula: Simple Interest = Principal × Interest Rate × Time.

Calculating Simple Interest

• 💰 The principal is the amount borrowed, which is $8,000 in this case.
• 📈 The interest rate is 7%, which needs to be converted to a decimal (0.07) by dividing by 100.
• ⏳ The time period is 5 years.
• 🧮 Applying the formula: $8,000 \times 0.07 \times 5 = $2,800.
• ✅ Tanya will pay $2,800 in interest over 5 years.