Examples – Simple Interest



Simple InterestI=P x r x tFinal ValueA=P+ISimple InterestInterest (I)Principal (P)Term (t)Rate (r)per annumHOW TO Solve Problems Involving Simple InterestSTEPSExample 1:Example 2:How much interest is earned on an investment of $5000.00 at 3.00% per annum over a 2-year term?If the interest earned is $45.00 and the rate is 4% for 3 years, calculate the principal that was invested.1. Write the formula2. Write the ‘knowns’3. Insert the ‘knowns’4. Solve algebraically (do the opposite)Examples – Simple InterestName: Block: You would like to invest $100. (This is your principal)Calculate how much interest you would earn for the following stipulations.(Key is to write down your equation every single time and then write the 'knowns' - make your shopping list)3% per annum over a 2 year period.3.75% per annum over a 4 year period.11% per annum over 15 months.What if we know how much interest we made but we didn’t know our principal or another variable like the rate or the time we left it for.center4572000How much did you invest (principal) if, you made 12.50 ininterest, at a rate of 4% and left it in for 2 year?How long did you leave your investment of $500 (principal) if, you made $35 in interest, at a rate of 7%?At what rate did you invest your $1000, if it made you $120 in interest over the course of 3 years? ................
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