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Simple interest

Use the simple interest formula I=PrnI = Prn to calculate interest and find unknown values in financial problems.

Worked examples

Calculating simple interest

Straightforward

Problem

Calculate the simple interest earned on a principal of $1500\$1500 at 4%4\% per annum for 33 years.

Finding the principal

Moderate

Problem

Simple interest of $192\$192 is earned at 4%4\% per annum over 44 years. Find the principal.

Finding the total amount repaid

Challenging

Problem

Sarah borrows $5000\$5000 at 3.5%3.5\% per annum simple interest for 44 years. What is the total amount she must repay?

Practise

Q1·Straightforward
Calculate the simple interest earned on a principal of $500\$500 at an interest rate of 4%4\% per annum for 33 years.
Q2·Straightforward
A deposit of $1200\$1200 earns simple interest at 5%5\% per annum. How much interest (in dollars) is earned over 22 years?
Q3·Straightforward
Calculate the simple interest on $800\$800 invested at 3%3\% per annum for 44 years.
Q4·Straightforward
How much simple interest is earned on a principal of $2500\$2500 at 6%6\% per annum over 55 years?
Q5·Moderate
Simple interest of $180\$180 is earned at 6%6\% per annum over 55 years. What was the principal (in dollars)?
Q6·Moderate
A principal of $1600\$1600 earns $240\$240 in simple interest over 55 years. What is the annual interest rate as a percentage?
Q7·Moderate
A principal of $2000\$2000 earns $350\$350 in simple interest at 7%7\% per annum. For how many years was the money invested?
Q8·Moderate
Simple interest of $300\$300 is earned at 5%5\% per annum over 44 years. Find the principal (in dollars).
Q9·Challenging
Emma invests $3000\$3000 at 4%4\% per annum simple interest for 55 years. What is the total amount in her account at the end of this period?
Q10·Challenging
A loan of $4500\$4500 is taken out at 6%6\% per annum simple interest for 33 years. What is the total amount owed at the end of the loan period?
Q11·Challenging
Two investments are compared. Investment A: $2000\$2000 at 5%5\% p.a. simple interest for 66 years. Investment B: $2500\$2500 at 4%4\% p.a. simple interest for 55 years. How much more does Investment B return in total than Investment A?
Q12·Challenging
Thomas invests $4000\$4000 at 4.5%4.5\% per annum simple interest. After 44 years, what is the total amount in the account?