First, we will look at a money word problem involving calculating Simple Interest. Simple Interest word problems are based on the formula for Simple Interest and the formula for Amount. Then, we will look at a money word problem that involves coins and dollar bills.

Related Topics:Compound Interest Word Problems

Other Algebra Word Problems

Formula for Simple Interest

*i = prt *

* i * represents the interest earned

Formula for Amount

* A* represents what your investment is worth if you consider the total amount of the original investment (

*Example: *

James needs interest income of $5,000. How much money must he invest for one year at 7%? (Give your answer to the nearest dollar)

* Solution: *

5,000 = *p*(0.07)(1)

* p* = 71,428.57

He must invest $71,429

Pam invested $5000. She earned 14% on part of her investment and 6% on the rest. If she earned a total of $396 in interest for the year, how much did she invest at each rate?

Note that this problem requires a chart to organize the information. The chart is based on the interest formula, which states that the amount invested times the rate of interest = interest earned. The chart is then used to set up the equation.

Example:

Suppose $7,000 is divided into two bank accounts. One account pays 10% simple interest per year and the other pays 5%. After three years there is a total of $1451.25 in interest between the two accounts. How much was invested into each account (rounded to the nearest cent)?

*Example: *

Paul has $31.15 from paper route collections. He has 5 more nickels than quarters and 7 fewer dimes than quarters. How many of each coin does Paul have?

* Solution: *

Let *x* be the number of quarters

*x* + 5 be the number of nickels

*x* – 7 be the number of dimes

25*x* + 5(*x* + 5) + 10(*x* – 7) = 3,115

25*x* + 5*x* + 25 + 10*x* – 70 = 3,115

40*x* = 3,160

*x* = 79

Example:

David has only $5 bills and $10 bills in his wallet. If he has 5 bills totaling $35, how many of each does he have?

Martin has a total of 19 nickels and dimes worth $1.65. How many of each type of coin does he have? Note that this problem requires a chart to organize the information. The chart is based on the total value formula, which states that the number of coins times the value of each coin = the total value. The chart is then used to set up the equation.

Example:

You have three times as many quarters as dimes and the total amount of money is $6.80. How many quarters and dimes do you have?

Example:

You have 6 times as many quarters as dimes and the total amount of money ia $8.00. How many quarters and dimes do you have?

Example:

A pile of 16 coins consists of pennies and nickels. The total amount of money is 36 cents. How many nickels and pennies do you have?

Example:

You bought 16 stamps consisting of 37-cent stamps and 23-cent stamps. If the total cost of the stamps is $4.10, find the number and types of stamps purchased.

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