# Word Problems on Simple Interest

Word Problems on Simple Interest are solved here:

1. Robert deposits $3000 in State Bank of India for 3 year which earn him an interest of 8%.What is the amount he gets after 1 year, 2 years and 3 years? Solution: In every$ 100, Robert gets $8. (Since rate is 8% → 8 for every 100) Therefore, for$ 1 he gets = $8/100 And for$ 2000 he gets = 3000 x 8/100

= $240 Simple Interest for 1 year =$ 240.

Simple Interest for 2 year = $240 x 2 =$ 480

Simple Interest for 3 year = $240 x 3 =$ 720

Therefore, Amount after 1 year = Principal (P) + Simple Interest (SI)

= 3000 + 240

= $3240 Amount after 2 years = Principal (P) + Simple Interest (SI) = 3000 + 480 =$ 3480

Amount after 3 years = Principal (P) + Simple Interest (SI)

= 3000 + 720 = $3720 We observe from the above example that, the Interest cannot be calculated without Principal, Rate and Time. Therefore, we can conclude that Simple Interest (S.I.) depends upon: (i) Principal (P) (ii) Rate (R) (iii) Time (T) And therefore, the formula for calculating the simple interest is Simple Interest (SI) = {Principal (P) × Rate (R) × Time (T)}/100 Amount (A) = Principal (P) + Interest (I) Principal (P) = Amount (A) – Interest (I) Interest (I) = Amount (A) – Principal (P) 2. Richard deposits$ 5400 and got back an amount of $6000 after a year. Find the simple interest he got. Solution: Principal (P) =$ 5400,

Amount (A) = $6000 Simple Interest (SI) = Amount (A) – Principal (P) = 6000 - 5400 = 600 Therefore, Richard got an interest of$ 600.

3. Seth invested a certain amount of money and got back an amount of $8400. If the bank paid an interest of$ 700, find the amount Sam invested.

Solution:

Amount (A) = $8400, Simple Interest (SI) =$ 700

Principal (P) = Amount (A) – Interest (I)

= 8400 - 700

= 7700

Therefore, Seth invested $7700. 4. Diego deposited$ 10000 for 4 year at a rate of 6% p.a. Find the interest and amount Diego got.

Solution:

Principal (P) = $10000, Time (T) = 4 years, Rate (R) = 6% p.a. Simple Interest (SI) = {Principal (P) × Rate (R) × Time (T)}/100 = (10000 x 6 x 4)/100 =$ 2400

Amount (A) = Principal (P) + Interest (I)

= 10000 + 2400

= $12400 The interest Diego got =$ 2400.

Therefore, the amount Diego got \$ 12400.

Word Problems on Simple Interest.

In Simple Interest when the Time is given in Months and Days.

To find Principal when Time Interest and Rate are given.

To find Rate when Principal Interest and Time are given .

To find Time when Principal Interest and Rate are given.

Worksheet on Simple Interest.