Simple Interest Worksheet With Answers and Solutions

Understanding Simple Interest

Simple interest is a type of interest that is calculated only on the initial principal amount, without considering any interest accrued over time. It is an easy and straightforward way to calculate the interest earned or owed on a loan or investment. In this worksheet, we will practice calculating simple interest using the formula:

Simple Interest (SI) = Principal (P) × Rate ® × Time (T)

Formula Explanation

• Principal (P): The initial amount borrowed or invested.
• Rate ®: The interest rate, usually expressed as a decimal or percentage.
• Time (T): The time period for which the interest is calculated, usually in years.

Example Problems

Problem 1

A person borrows $500 for 2 years at an interest rate of 5% per annum. Calculate the simple interest.

Solution

P = $500 R = 5% = 0.05 T = 2 years

SI = P × R × T = 500 × 0.05 × 2 = 50

Problem 2

An investor invests $2000 for 5 years at an interest rate of 3% per annum. Calculate the simple interest.

Solution

P = $2000 R = 3% = 0.03 T = 5 years

SI = P × R × T = 2000 × 0.03 × 5 = 300

Problem 3

A company borrows $10,000 for 1 year at an interest rate of 8% per annum. Calculate the simple interest.

Solution

P = $10,000 R = 8% = 0.08 T = 1 year

SI = P × R × T = 10,000 × 0.08 × 1 = 800

Practice Problems

Problem 1

A student borrows $800 for 3 years at an interest rate of 4% per annum. Calculate the simple interest.

Problem 2

A business invests $15,000 for 2 years at an interest rate of 6% per annum. Calculate the simple interest.

Problem 3

A person invests $5000 for 1 year at an interest rate of 2% per annum. Calculate the simple interest.

Answers and Solutions

Problem 1

SI = 800 × 0.04 × 3 = 96

Problem 2

SI = 15,000 × 0.06 × 2 = 1800

Problem 3

SI = 5000 × 0.02 × 1 = 100

💡 Note: Remember to convert the interest rate from percentage to decimal by dividing by 100.

Summary

In this worksheet, we practiced calculating simple interest using the formula SI = P × R × T. We solved example problems and practice problems to understand how to apply the formula. Remember to convert the interest rate from percentage to decimal and use the correct values for principal, rate, and time.

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