Coaching Centre
Simple interest
The simple interest formula I = Prn, finding the total amount, and rearranging to find the rate, principal or time.
The formula
$P$ is the principal (amount invested or borrowed), $r$ the interest rate per period as a decimal, and $n$ the number of periods. The total amount is $A = P + I$.
5000 dollars invested. The same interest is added every year.
Find the simple interest on $\$5000$ at $4\%$ p.a. for $3$ years.
$\$2000$ earns $\$300$ simple interest over $5$ years. Find the rate.
Simple interest on $\$5000$ at $4\%$ p.a. for $3$ years?
$5000 \times 0.04 \times 3$.
$\$2000$ earns $\$300$ in $5$ years. Rate as a percentage?
$300 \div 10\,000$.
$\$4000$ at $5\%$ p.a. earns $\$1000$. How many years?
$1000 \div 200$.
Total amount after $\$5000$ earns $\$600$ interest?
$A = P + I$.
What principal earns $\$450$ at $6\%$ p.a. over $3$ years?
$450 \div 0.18$.
Simple interest on $\$3000$ at $4\%$ p.a. for $18$ months?
$3000 \times 0.04 \times 1.5$.
A $\$1200$ loan has simple interest of $8\%$ p.a. How much interest is charged per month?
Per year $1200 \times 0.08 = \$96$, so per month $96 \div 12 = \$8$.
The graph of simple interest against time is:
The same interest is added each year.
New numbers every time. Keep going until you get five in a row.