Simple Interest Examples in Math

Start with the recap, study the fully worked examples, then use the practice problems to check your understanding of Simple Interest.

This page combines explanation, solved examples, and follow-up practice so you can move from recognition to confident problem-solving in Math.

Concept Recap

Simple interest is interest calculated only on the original principal amount, using the formula I=PrtI = Prt.

You lend someone \$100 and they pay you \$5 every year as a thank-you — the \$5 never changes because it is always based on the original \$100.

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How to Use These Examples

  • Read the first worked example with the solution open so the structure is clear.
  • Try the practice problems before revealing each solution.
  • Use the related concepts and background knowledge badges if you feel stuck.

What to Focus On

Core idea: Simple interest pays a fixed amount each period because it is always computed on the starting principal, never on interest already earned.

Common stuck point: The procedure for simple interest is the easy part; the trap is compounding by accident. Asking "Is each period's interest computed on the original principal alone (so the yearly interest never changes)?" first is what keeps a correct-looking calculation from being attached to the wrong concept.

Sense of Study hint: Ask: Is each period's interest computed on the original principal alone (so the yearly interest never changes)?

Worked Examples

Example 1

easy
Step-by-step: find the simple interest on \$800 at 5% for 3 years.

Answer

$120\$120

First step

1
Convert 5% to decimal: r=0.05r=0.05.

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Example 2

medium
Find total amount A=P(1+rt)A=P(1+rt) for $1000 at 4% for 3 years.

Example 3

medium
You deposit \$750 at 4% simple interest. How much do you have after 5 years?

Example 4

hard
\$3200 at simple 6% — what does the loan total after 2 years and 6 months?

Example 5

hard
Compare interest: \$1000 at simple 5% for 2 years vs \$1000 at compound 5% (annual) for 2 years.

Example 6

challenge
Two investments: A is $2000 at simple 6% for 3 years; B is $P\$P at simple 4% for 5 years. They earn equal interest. Find PP.

Practice Problems

Try these problems on your own first, then open the solution to compare your method.

Example 1

easy
Find the simple interest on \$200 at 5% for 1 year.

Example 2

easy
Find the interest on \$500 at 4% for 2 years.

Example 3

easy
Convert 6% to a decimal rate for I=PrtI=Prt.

Example 4

easy
What does PP stand for in I=PrtI = Prt?

Example 5

easy
Interest \$30 on \$300 for 1 year — what is the rate?

Example 6

easy
Find the total amount: \$100 principal plus \$8 interest.

Example 7

easy
Simple interest on \$1000 at 0% for 5 years?

Example 8

easy
For 6 months, what value of tt (in years) do you use?

Example 9

medium
Find the simple interest on \$1200 at 3.5% for 2 years.

Example 10

medium
How long until \$500 at 4% earns \$60 simple interest?

Example 11

medium
What principal earns \$45 at 5% in 3 years (simple)?

Example 12

medium
Find the total amount A=P(1+rt)A=P(1+rt) for $800 at 6% for 2 years.

Example 13

medium
\$2000 grows to \$2300 in 3 years (simple). Find the annual rate.

Example 14

medium
Compare interest: \$1000 at 5% for 4 years vs \$2000 at 5% for 2 years.

Example 15

medium
Simple interest on \$1500 at 8% for 9 months.

Example 16

challenge
\$1000 at simple 5% vs the simple-interest difference if rate rises to 7% over 4 years.

Example 17

challenge
A loan of \$5000 must be repaid as \$5900 after 3 years simple interest. Find the rate.

Example 18

challenge
How many years for any principal to double at 4% simple interest?

Example 19

medium
Find the simple interest on \$250 at 8% for 3 years.

Example 20

medium
\$400 earns \$48 simple interest in 2 years. Find the annual rate.

Example 21

easy
Find the simple interest on \$600 at 4% for 1 year.

Example 22

easy
Convert 7.5% to a decimal rate.

Example 23

easy
Find the simple interest on \$1000 at 3% for 2 years.

Example 24

easy
For 3 months, what value of tt (in years) do you use?

Example 25

easy
Find the total amount: \$500 principal plus \$45 interest.

Example 26

easy
Find the simple interest on \$200 at 6% for 5 years.

Example 27

medium
Find the simple interest on \$2500 at 4.5% for 4 years.

Example 28

medium
\$1200 at 5% simple interest for 18 months. Find the interest.

Example 29

medium
\$1500 grows to \$1800 in 4 years (simple). Find the annual rate.

Example 30

medium
How long does \$600 at 4% need to earn \$72 simple interest?

Example 31

medium
What principal earns \$120 at 4% in 5 years (simple)?

Example 32

medium
Simple interest on \$900 at 6% for 8 months.

Example 33

medium
\$3000 earns \$180 simple interest in 2 years. Find the annual rate.

Example 34

medium
$2000 at 5.5% simple interest for 6 years. Find total amount AA.

Example 35

medium
Compare: \$500 at 8% for 2 years vs \$1000 at 4% for 2 years (simple).

Example 36

hard
A \$4000 loan is repaid as \$4720 after 3 years (simple). Find the rate.

Example 37

hard
How long does \$2500 at 5% simple interest take to earn \$500?

Example 38

hard
At what simple-interest rate will \$800 grow to \$1040 in 6 years?

Example 39

hard
Find the principal that earns \$294 at 7% simple interest in 3 years.

Example 40

hard
\$1000 at simple 5% over 10 years vs \$1000 at simple 10% over 5 years — which earns more interest?

Example 41

hard
How many years for any principal to double at 5% simple interest?

Example 42

challenge
A loan of $1500 charges simple interest. After 2 years it grows to $1620; after 5 years to a total of $X. Find XX.
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Background Knowledge

These ideas may be useful before you work through the harder examples.

percentagesdecimal operationsmultiplication