STEP BY STEP SIMPLE INTEREST

* * Round amounts to the nearest cent Round interest rates and time periods to one decimal place

1.

Calculate the interest earned (I).

a) P = $10,000 r = 5% t = 3 years b) P = $2,000 r = 10% t = 10 years What is the final amount repaid? c) P = $50,000 r = 4.5% t = 20 years What is the final amount repaid? 2. Calculate the principal of the loan (P).

a) I = $1440 r = 6% t = 2 years b) I = $9000 r = 12% t = 15 years c) I = $140 r = 3.5% t = 8 years 3. Calculate the rate (r) of the following loans.

a) P = $20,000 I = $3600 t = 3 years b) P = $5,000 I = $2000 t = 10 years

c) P = $350 I = $385 t = 20 years 4. Calculate the time (t) of the following loans.

a) P = $3500 I = $840 r = 4% b) P = $15,000 I = $12,000 r = 8% c) P = $810 I = 850.50 r = 15% 5. a) b) 6. 7. 8. a) b) 9. $8000 is borrowed at 4% for 5 years. How much simple interest is earned? What is the total amount to be paid back? A $25,000 loan at 8% earned $16000 interest. How long was the loan for? A $1600 loan earns $114 interest in 9 months. What was the interest rate? $1230 is borrowed at 15% for 6 months. How much simple interest is earned? What is the total amount to be paid back? A $22,000 loan earns $5390 interest in 7 years. What was the interest rate?

10. a) b)

$8500 is borrowed at 7.5% for 26 weeks. How much simple interest is earned? What is the total amount to be paid back?

11. A loan at 10% earns $2775 interest in 5 years. What was the original amount (principal) of the loan? 12. A loan at 4.5% earns $135 interest in 6 years. What was the original amount (principal) of the loan? 13. a) b) 14. 15. $6500 is borrowed at 20% for 2 years. How much simple interest is earned? What is the total amount to be paid back? A $35000 loan earns $2625 interest in 3 years. What was the interest rate? A $950 loan at 17.5% earned $665 interest. How long was the loan for?

16. A loan at 7.5% earns $900 interest in 3 years. What was the original amount (principal) of the loan? 17. 18. A $9800 loan earns $8575 interest in 25 years. What was the interest rate? A $1000 loan at 3.8% earned $114 interest. How long was the loan for?

19. A loan at 21% earns $8977.50 interest in 9 years. What was the original amount (principal) of the loan? 20. 21. A $500,000 loan at 5% earned $75,000 interest. How long was the loan for? A $1500 loan earns $183.75 interest in 3.5 years. What was the interest rate?

22. Ernie borrowed $5500 for a new motor bike, to be paid back over 5 years. The bank is charging him 12% simple interest, calculated yearly. Calculate: (a) the total interest that will be paid back, (b) the total to be paid back,

23. To buy a computer, Tom borrowed $3000 at 9% simple interest calculated yearly. If he will be making monthly payments for four years, calculate: (a) the amount of interest to be paid, (b) the total amount to be paid back,

24. When Jane bought her V.C.R., she borrowed $500 at 5% simple interest. The total interest payable over the period of the loan is $50. How many years will it take her to repay the loan?

25. Linda borrowed $1500 at 5% simple interest per year, for an overseas holiday. Over the period of the loan she will pay $250 in interest. How long was Linda's loan for?