Simple Interest Problems
Simple Interest Formula:
I = P × r × t
Where: I = Interest, P = Principal, r = Rate (as a decimal), t = Time (in years)
1. Sarah deposits $2,000 into a savings account that earns 5% simple interest per year. How much interest will she earn after 3 years?
P = _______________ r = _______________ t = _______________
Working:
Interest earned = $ _______________
2. Michael borrows $5,000 from the bank at a simple interest rate of 8% per year. How much interest will he owe after 2 years?
P = _______________ r = _______________ t = _______________
Working:
Interest owed = $ _______________
3. Emma invests $1,500 at 4% simple interest per year for 5 years. Calculate:
a) The interest earned:
Interest = $ _______________
b) The total amount she will have after 5 years (Principal + Interest):
Total amount = $ _______________
4. Jacob borrows $3,200 at 6.5% simple interest per year for 18 months. How much interest will he pay? (Hint: Convert months to years)
P = _______________ r = _______________ t = _______________ years
Working:
Interest = $ _______________
5. A loan of $8,000 earns $1,200 in simple interest over 3 years. What was the annual interest rate?
Working:
Interest rate = _______________ %