How to Solve Simple Interest Problems? (+FREE Worksheet!)

Watch this practice video for additional examples and reinforcement:

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Step-by-step guide to solve simple interest

• Simple Interest: The charge for borrowing money or the return for lending it.
• To solve a simple interest problem, use this formula:
  Interest \(=\) principal \(\times\) rate \(\times\) time  \( ⇒ \color{blue}{I=p \ × \ r \ × \ t}\)  

Simple Interest

Simple Interest – Example 1:

Find simple interest for \( $450\) investment at \(7\%\) for \(8\) years.

Solution:

Use Interest formula: \(\color{ blue }{I=prt }\)
\(P=$450\), \(r=7\%=\frac{7}{100}=0.07\) and \(t=8\)
Then: \(I=450 \ × \ 0.07 \ × \ 8=$252\)

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Simple Interest – Example 2:

Find simple interest for \( $5,200\) investment at \(4\%\) for \(3\) years.

Solution:

Use simple interest formula: \(\color{ blue }{I=prt }\)
\(P=$5,200\), \(r=4\%=\frac{4}{100}=0.04\) and \(t=3\)
Then: \(I=5,200 \ × \ 0.04 \ × \ 3=$624\)

Simple Interest – Example 3:

Find simple interest for \($5,000\) investment at \(3\%\) for \(4\) years.

Solution:

Use simple interest formula: \(\color{ blue }{I=prt }\)
\( P=$5,000, r=3\%=\frac{3}{100}=0.03\) and \(t=4\)
Then: \(I= 5,000 ×0.03×4=$600\)

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li>\($1,300\) at \(5\%\) for \(6\) years.

Download Simple Interest Worksheet

Answers

1. \(\color{blue}{$1,690.00}\)
2. \(\color{blue}{$5,602.50}\)
3. \(\color{blue}{$37,376.00}\)
4. \(\color{blue}{4 \ years}\)
5. \(\color{blue}{$20,440.00}\)
6. \(\color{blue}{$500.00}\)

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