Related Topics:
More Lessons for Grade 8
Math Worksheets
Videos, worksheets, and solutions to help Grade 8 students learn how to solve percent problems involving simple interest.
Simple Interest Word Problems
Simple interest word problems involve calculations related to loans or investments where the interest earned or paid is a fixed percentage of the principal amount over a specific period. The key difference between simple interest and compound interest is that simple interest is only calculated on the initial principal, whereas compound interest is calculated on the principal and any accumulated interest.
What is the Simple Interest Formula?
The formula for calculating simple interest is:
Simple Interest = principal × rate × time
I = P × r × t
Where:
I = Simple Interest (the amount of interest earned or paid)
P = Principal (the initial amount of money borrowed or invested)
R = Annual Interest Rate (expressed as a decimal)
T = Time (the duration of the loan or investment in years)
Sometimes, you might need to find the total amount (A) after the interest has been added to the principal:
A = P + I
or
A = P(1 + RT)
The following diagrams show the Simple Interest Formula and how the formula can be transformed to solve for each variable. Scroll down the page for more examples and solutions on how to use the Simple Interest Formula.
Here are some common types of interest word problems:
You will earn $150 in simple interest.
The total amount to repay is $5800.
The annual interest rate was \(0.06 \times 100% = 6%\).
It will take 3 years to earn $360 in interest.
You will owe $54 in interest.
Simple Interest Word Problems
This video shows how to solve for a missing part of the interest formula when the interest is given by substituting known values and solving for the unknown variable.
Simple Interest I = prt
This video lesson shows how to calculate Simple Interest using this equation I = prt. It also shows how to manipulate that equation to solve for all 4 variables.
Try out our new and fun Fraction Concoction Game.
Add and subtract fractions to make exciting fraction concoctions following a recipe. There are four levels of difficulty: Easy, medium, hard and insane. Practice the basics of fraction addition and subtraction or challenge yourself with the insane level.
We welcome your feedback, comments and questions about this site or page. Please submit your feedback or enquiries via our Feedback page.