WORKSHEET ON SIMPLE INTEREST

Find the simple interest charged when :

Problem 1 :

$5000 is borrowed for 1 year at 12% per annum simple interest.

Solution

Problem 2 :

$2500 is borrowed for 2 years at 8% per annum simple interest.

Solution

Problem 3 :

$40000 is borrowed for 5 years at 11% per annum simple interest. 

Solution

Problem 4 :

$250000 is borrowed for 9 months at 20% per annum simple interest.

Solution

Find the total amount needed to repay a loan of :

Problem 5 :

$2400 borrowed for 3 years at 10% per annum simple interest.

Solution

Problem 6 :

$8000 borrowed for 7 years at 12% per annum simple interest.

Solution

Problem 7 :

$7500 borrowed for 2 1/2 years at 8% per annum simple interest.

Solution

Problem 8 :

$23000 borrowed for 4 months at 15% per annum simple interest.

Solution

Problem 9 :

Kyle borrows $25000 at 6% p.a. Simple interest for 4 years.

(a)  Find the total amount needed to repay the loan.

(b)  Calculate the monthly repayment required to pay this loan off in 48 equal instalments.

Solution

Problem 10 :

You deposit $5000 in an account earning 7.5% simple interest. How long will it take for the balance of the account to be $6500?

Solution

Problem 11 :

You put $400 in an account. The account earns $18 simple interest in 9 months. What is the annual interest rate?

Solution

Problem 1 :

Find the simple interest rate (to the nearest per cent) which will allow €2500 to earn €675 interest in 3 years.

Solution

Problem 2 :

What sum of money would you have to invest for 5 years at 11% simple interest to produce interest at €3080?

Solution

Problem 3 :

For how many years would $8000 have to be invested at 11 1/2% simple interest to produce €5520 interest?

Solution

Problem 4 :

What simple interest rate would allow €6000 to grow to an amount €14550 in 10 years?

Solution

Problem 5 :

What simple interest would $8000 earn in 3 months if the rate of interest is 11 1/4 % pa?

Solution

Problem 6 :

A building society pays interest daily. If an amount of $1564 were invested at 5.5% pa, how much simple interest would be earned in:

i. 1 day?     ii. 3 days?     iii. 29 days?

Solution

Problem 7 :

After 7 years at 3% simple interest per year, your savings account earns $63.

a. What is the principal?

b. How much money do you have left after buying the video game system?

Solution

Problem 8 :

The owners of a company want to invest $12,000 for 4 years.

a) Which account should they choose? Explain.

• Account A earns 5% simple interest per year.
• Account B earns 5% interest compounded annually.

b) How much more do they earn by choosing the better account?

Solution

Problem 9 :

A music company offers a loan to buy a drum set for $1500. What is the monthly payment?

Solution

Problem 10 :

How many years will it take for $2000 to double at a simple interest rate of 8%? Explain how you found your answer.

Solution

Problem 1 :

Calculate :

a) The simple interest earned on $2000 at 5% p.a. for 3 years.

b) Using a table, the compound interest earned on $2000 at 5% p.a. for 3 years.

Solution

Problem 2 :

If $50,000 is invested at 9% p.a. compound interest, use a table to find:

a) The final amount after 2 years.

b) How much interest was earned in the 2 year period.

Solution

Problem 3 :

Determine the interest earned for the following investments 

a. $4000 at 8% p.a. compound interest for 2 years.

b. $12000 at 6% p.a. compound interest for 3 years.

c. $500 at 3% p.a. compound interest for 3 years.

Solution

Problem 4 :

Tong loaned Jody $50 for a month. He charged 5% simple interest for the month. How much did Jody have to pay Tong?

Solution

Problem 5 :

Jessica’s grandparents gave her $2000 for college to put in a savings account until she starts college in four years. Her grandparents agreed to pay her an additional 7.5% simple interest on the $2000 for every year.

Solution

Problem 6 :

Mai put $4250 in the bank at 4.4% interest compounded annually. How much was in her account after 7 years?

Solution

Problem 7 :

What is the difference in the amount of money in the bank after five years if $2500 is invested at 3.2% interest compounded annually or at 2.9% interest compounded annually?

Solution

Problem 8 :

Ronna was listening to her parents talking about what a good deal compounded interest was for a retirement account. She wondered how much money she would have if she invested $2000 at age 20 at 2.8% annual interest compounded quarterly (four times each year) and left it until she reached age 65. Determine what the value of the $2000 would become.

Solution