What you’ll learn to do: Solve simple interest applications involving rate, time, and principal

How much does a loan really cost?

Have you ever needed to take out a loan? Whether it’s to pay for college, buy a car, or purchase a home, people take out loans to help them pay for some of life’s most important purchases. But one thing that many people find confusing about loans is how interest is calculated on them. Using the simple interest formula, we can figure out simple interest problems and get a better idea of the true cost of some loans. In this section, we’ll explore how to use the simple interest formula and solve simple interest applications.

Before you get started in this module, try a few practice problems and review prior concepts.