Worksheet on Factors affecting Interest is here. In this article, you can come across problems related to Simple Interest. SI is received or paid over a particular period of time for the percentage fixed of the principal amount. Find all the terms and solved examples in Factors affecting Interest Worksheets with a detailed explanation. Refer to SI (Simple Interest) Formula and know about it in detail. Practice the Problems in Simple Interest Word Problems Worksheet and test your preparation levels.
When we borrow money from a person for a certain period of time, we have to return them with some extra amount known as interest.
Formula to Calculate Simple Interest = P * T * R / 100
where P is the Principal amount
T is Time Period
R is the Rate of Interest
To calculate the amount, we use the formula = Principal + Interest
Also, Refer:
Simple Interest Questions and Answers
Problem 1:
A total of $20,000 is invested part of it at 6% and part of it at 6.5%. The total interest after one year is $1,260. How much was invested at each rate?
Solution:
| Principal | Rate | Interest | |
|---|---|---|---|
| 6% | X | .06 | |
| 5% | 20000 – X | 0.65 | |
| Total | 20000 | – |
To find the amounts in the third column, we have to multiply the 1st column(Principal) and 2nd column(Rate)
| Principal | Rate | Interest | |
|---|---|---|---|
| 6% | X | .06 | .06X |
| 5% | 20000 – X | 0.65 | 0.65 (20000 – X) |
| Total | 20000 | – | 1260 |
.06X + 0.65 (20000 – X) = 1260
1000 (.06X) + 1000(0.65)(20000 – X) = 1000(0.66)
60X + 65(2000 – X) = 1260000
60X + 1300000 – 65X = 1260000
-5X + 1300000 = 1260000
Subtract with 1300000 on both the sides
-5X + 1300000 = 1300000 = 1260000 – 1300000
-5X = 40000
X = -40000/5
X = 8,000 at 6%
20000 – X = 12,000 @ 6.5%
Therefore, the amount invested at 6% is 8,000
The amount invested at 6.5% is 12,000
Problem 2:
Find the interest that is generated from a $10,000 investment for 2 years at 6% simple interest?
Solution:
As given in the question,
Principal = 10,000
Rate = 6% = 0.06
Time = 2 years
To calculate the interest, we use the formula
Interest = Principal * Time * Rate / 100
Interest = 10,000 * 2 * 0.06 / 100
Interest = 1200
Therefore, the interest which is generated from $10,000 investment for 2 years at 6% simple interest is $1200
Problem 3:
John receives a large inheritance. He wants to invest part of it at 5% and $10,000 more than this amount at 11%. To earn $1200 per year in interest, how much will he need to invest at each rate?
Solution:
As given in the question,
Principal = $10,000
Rate = 5%
Interest per year = $1200
Let the amount which is invested at 5% = X
The amount invested at 11% = X + 10,000
To find the invest rate, we use the formula
Interest = Principal * Time * Rate / 100
1200 = 0.05X + 0.11(X + 10,000)
0.05X + 0.11X + 1100 = 1200
0.16X + 1100 = 1200
Subtract with 1100 on both sides
0.16X = 100
Divide by 0.16 on both sides
0.16X / 0.16 = 100 / 0.16
X = 625
Therefore, $625 will be invested at 5%
$10,625 will be invested at 11%
Problem 4:
John invests his savings in two ways: some go into a corporate bond paying 14% and $12,000 more than three times as much goes into a municipal bond fund paying 3%. If his total annual interest from the two investments is $11, 860. How much invested in each?
Solution:
Let the amount invested at 14% = X
Then, the amount invested at 3% = 3X + 12,000
0.14X + 0.3(3X + 12000) = 11,860
0.14X + 0.09X + 360 = 11,860
0.23X + 360 = 11,860
Subtract with 360 on both sides
0.23X + 360 – 360 = 11,860 – 360
0.23X = 11, 500
Divide by 0.23 on both sides
0.23X / 0.23 = 11,500 / 0.23
X = 50,000
Therefore, $50,000 is invested at 14%
$1,62,000 is invested at 3%
Problem 5:
Ramu deposits Rs. 5,000 in a bank which offers at 8% per annum. How much she will receive after 3 years?
Solution:
Rate is calculated per Rs. 100
For 1 year, on Rs. 100, SI = 8
For 1 year, on Rs. 1, SI = 8/100
For 1 year on Rs. 5000, SI = 5000 * 8/100
For 3 years on Rs. 5000, SI = 5000 * 8 * 3 / 100
= Rs. 1200
Therefore, Ramu will receive an interest of Rs. 1200 after 3 years
Problem 6:
Rahul borrowed Rs. 700 from a bank at 7% per year for 4 years. How much interest will he pay at the end of the fourth year?
Solution:
As given in the question,
Principal = Rs. 700
Rate = 7% per annum
Time = 4 years
Simple Interest = Principal * Rate * Time / 100
SI = 700 * 7 * 4 / 100
SI = Rs. 196
Therefore, Rahul paid an interest of Rs. 196 at the end of the fourth year.
Problem 7:
John invests Rs. 5000 in savings account at an annual rate of 8% for 5 years.
a) Find the amount of money he earned in the interest?
b) Find the savings accounts total value?
Solution:
As given in the question,
Principal = 5000
Rate = 8% = 0.08
Time = 5 years
We know that
Simple Interest = Principal * Time * Rate / 100
SI = 5000 * 5 * 0.08
SI = 400 * 5
SI = 2000
Therefore, the money he earned in interest = Rs. 2000
Total value in a savings account
F = I + P
F = 2000 + 5000
F = 7000
The total value of his savings account = 7000
Therefore,
The money he earned in interest = Rs. 2000
The total value of his savings account = 7000
Problem 8:
Noel invests Rs. 8000 into an account paying an annual interest rate of 8.7%. How many years will it take for him to earn Rs. 4872 in interest?
Solution:
As given in the question,
Principal = 8000, Rate = 8.7% = 0.087, I = 4872
We know the formula as,
Simple Interest S. I = P * T * R / 100
Substitute the values in the above equation,
4872 = 8000 * 0.087 * T / 100
4872 = 696 T
Divide by 696 on both sides
4872 / 696 = 696 T / 696
T = 7 years
Problem 9:
Marvel invest 3000 into a savings account. In 4 years she earns a total of Rs. 768 in interest. What is the annual interest rate offered by this account?
Solution:
As given in the question,
Principal = 3000, Interest = Rs. 768, Time = 4 years
We know the formula,
Simple Interest = P * T * R / 100
768 = 3000 * R * 4
768 = 12000 * R
Divide by 12000 on both sides
768 / 12000 = 12000 * R / 12000
R = 768 / 12000
R = 0.064
R = 6.4%
Therefore, the annual interest rate offered by this account = 6.4%
Problem 10:
Lucie invested Rs. 25000 into an account paying 8% annual interest. How many years will it take for his account to reach Rs. 43000?
Solution:
As given in the question,
Principal = Rs. 25000, F = 43000, Rate = 8% = 0.08
As we know that,
I = F – P
I = 43000 – 25000
I = 18000
We also know that
SI = P * R * T / 100
18000 = 25000 * 0.08 * T
Divide by 2000 on both sides
18000 / 2000 = 25000 * 0.08 * T /2000
T = 9 years
Therefore, it takes 9 years will it take for his account to reach Rs. 43000.