Exercises: Simple Interest - Common Core Math - Percents

A

Warm-Up: Percents and Decimals

These problems review skills you need for simple interest.

1.

Which decimal is equal to 3%?

A.

3.0

B.

0.3

C.

0.03

D.

0.003

2.

Calculate: $800 \times 0.05 \times 2$

3.

A savings account pays 4% interest per year on the amount you deposit. After one year, a student earns $20 in interest. Which amount was most likely deposited?

A.

$80

B.

$200

C.

$500

D.

$800

B

Practice: Applying I = Prt

Use the simple interest formula $I = Prt$ to find the interest.

1.

Find the simple interest on a $600 deposit at 5% per year for 3 years.

2.

A student borrows $1,200 at 8% annual interest for 2 years. How much interest does the student owe?

3.

Complete the calculation for $I = Prt$ where $P = \text{\char"0024}400$ , $r = 6\%$ , $t = 4$ years.

Step 1: Convert rate to decimal: $r =$ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲

Step 2: $I = 400 \times$ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ $\times 4 =$ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲

r as decimal:

r in formula:

I:

4.

What is the total amount (principal + interest) in an account after depositing $750 at 4% per year for 5 years?

C

Practice: Different Formats

These problems use different formats and include time periods in months.

1.

A loan charges 6% annual interest. If $900 is borrowed for 18 months, how much interest is owed?

A.

$81

B.

$972

C.

$48.60

D.

$162

2.

Convert each time period to years.

9 months = ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ years

30 months = ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ years

6 months = ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ years

9 months in years:

30 months in years:

6 months in years:

3.

A certificate of deposit (CD) pays 3.5% annual interest. If $2,000 is placed in the CD for 9 months, how much interest is earned?

D

Word Problems: Real-World Interest

Read each problem carefully. Show all steps.

1.

Mia opens a savings account with $1,500. The account earns 2.5% simple interest per year. How much interest will Mia earn after 4 years?

2.

Carlos takes out a $3,000 loan to buy a used bicycle and equipment for a delivery job. The loan charges 7% simple interest per year.

1.

How much interest will Carlos owe after 2 years?

2.

What is the total amount Carlos will repay (principal + interest) after 2 years?

3.

Carlos's friend says, 'By year 3, you'll owe interest on the interest you already paid — it compounds!' Is this correct for a simple interest loan?

A.

Yes, after the first year the interest starts compounding.

B.

No, simple interest is always calculated on the original principal only.

C.

Yes, but only if the loan goes past 2 years.

D.

It depends on the interest rate.

3.

Jordan wants to earn exactly $120 in simple interest from a savings account that pays 4% per year. If Jordan deposits $800, how many years must the money stay in the account?

E

Error Analysis: Find the Mistake

Each problem shows a student's work that contains an error. Identify the mistake and find the correct answer.

F

Challenge: Solve for the Unknown

These problems require rearranging the simple interest formula.

1.

A savings account earned $90 in simple interest over 3 years at a 3% annual rate. What was the principal deposited?

2.

A student borrowed $500 and paid back $560 total at the end of 2 years. What was the annual interest rate?

3.

Two savings options are available for a $2,000 deposit:

Option A: 4% per year for 3 years
Option B: 6% per year for 2 years

Which option earns more total interest? Show your calculations and explain your recommendation.