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 Factors affecting Interest
5th Grade Numbers Page
5th Grade Math Problems
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