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Example 1

The document provides examples of calculating simple interest on various principal amounts at given interest rates and time periods. It shows how to calculate the interest earned and total amount by using the simple interest formula: Interest = Principal x Rate x Time. For instance, one example shows calculating the $540 interest earned on a $4,000 principal amount with a 4.5% interest rate over 3 years. Another example shows calculating the $720 interest owed on a $3,000 loan with a 12% interest rate over 2 years.

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Jomar Villena
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250 views

Example 1

The document provides examples of calculating simple interest on various principal amounts at given interest rates and time periods. It shows how to calculate the interest earned and total amount by using the simple interest formula: Interest = Principal x Rate x Time. For instance, one example shows calculating the $540 interest earned on a $4,000 principal amount with a 4.5% interest rate over 3 years. Another example shows calculating the $720 interest owed on a $3,000 loan with a 12% interest rate over 2 years.

Uploaded by

Jomar Villena
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Example 1:

Find the simple interest on Rs. 3000 at a 7% rate of interest for one year.
Solution:
Let Principal = 3000, Rate of interest = 7%, n=1n=1
Simple
interest =(Principal)(Rate)(n)=(3000)7%=30007100=210=(Principal)(Rate)(n)=(3000)7%=30007
100=210
Example 2:
Find the simple interest on Rs. 10,000 at the rate of 5% for 5 years. Also find the total amount after this time.
Solution:
Let Principal = 10,000 Rs., Rate = 5%, Time =n=5=n=5
The amount of simple interest for 5 years is
Interest=(Principal)(Interest)(Time)=(10,000)(5%)(5)Interest=(10,000)(5100)(5)=2,500Int
erest=(Principal)(Interest)(Time)=(10,000)(5%)(5)Interest=(10,000)(5100)(5)=2,500

Hence the amount after 5 years = Principal+Interest=10,000+2,500=12,500 =


Principal+Interest=10,000+2,500=12,500
Example 3:
Find the simple interest on Rs. 156,00 for 112112 years at the rate of 5% per annum. Also find the total
amount.
Solution:
Let Principal = 15,600, Rate = 5% =5100=5100 =0.5=0.5, Time
= 112112years =(1+12)years=(1+12)years =32years=32years
Simple interest for 5
years =(Principal)(Interest)(Time)=(15,600)(5100)(32)=1,170=(Principal)(Interest)(Time)=(15,600)(
5100)(32)=1,170
Amount = Principal+Interest= 15,600+1,170=16,770 = Principal+Interest= 15,600+1,170=16,770
Example 4:
Find the simple interest on Rs. 8,000 for 40 days, at 10% per annum.
Solution:
Let Principal = 8,000 Rs., Rate = 10% per annum, Time = 40
days =40years365=40years365 =873years=873years
Simple interest =(Principal)(Rate)(n)=(8,000)(10100)(873)=6,40073

xample:

Sarah deposits $4,000 at a bank at an interest rate of 4.5% per year. How much interest will
she earn at the end of 3 years?

Solution:

Simple Interest = 4,000 4.5% 3 = 540

She earns $540 at the end of 3 years.

Example:
Wanda borrowed $3,000 from a bank at an interest rate of 12% per year for a 2-year
period. How much interest does she have to pay the bank at the end of 2 years?

Solution :

Simple Interest = 3,000 12% 2 = 720

She has to pay the bank $720 at the end of 2 years.

Example:

Raymond bought a car for $40, 000. He took a $20,000 loan from a bank at an interest
rate of 15% per year for a 3-year period. What is the total amount (interest and loan) that
he would have to pay the bank at the end of 3 years?

Solution :

Simple Interest = 20,000 13% 3 = 7,800

At the end of 3 years, he would have to pay

$20,000 + $7,800 = $27,800

Tutorial on Simple Interest


Examples:
1. Ian is investing $4,000 for 2 years. The interest rate is 5.5%. How much interest will Ian
earn after 2 years?

2. Doug made a 3 year investment. The interest rate was 4.5%. After 3 years, he earned
$675 in interest. How much was his original investment?

3. Kim got a loan of $4700 to buy a used car. The interest rate is 7.5%. She paid $1057.50
in interest. How many years did it take her to pay off her loan?

1. An investment earned $11.25 interest after 9 months. The rate was 5%. What was
the principal?
2. $2000 was invested for 3 years. It earned $204 in interest. What was the rate?

3. A loan of $1200 had $36 in interest. The rate was 6%. What was the length of the
loan?

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