Simple Interest Word Problems Worksheet

To solve these word problems, we use the simple interest formula:

$$
I = P \times r \times t
$$

Where:
- $ I $ = Interest earned or paid
- $ P $ = Principal (initial amount)
- $ r $ = Annual interest rate (as a decimal)
- $ t $ = Time in years

Let’s go through each problem step by step.

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1. How much interest does a $318 investment earn at 9% over one year?

- $ P = 318 $
- $ r = 9\% = 0.09 $
- $ t = 1 $

$$
I = 318 \times 0.09 \times 1 = 28.62
$$

✔ Answer: $28.62

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2. If you borrow $675 for six years at an interest rate of 10%, how much interest will you pay?

- $ P = 675 $
- $ r = 10\% = 0.10 $
- $ t = 6 $

$$
I = 675 \times 0.10 \times 6 = 405
$$

✔ Answer: $405

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3. If you borrow $421 for nine years at an interest rate of 4%, how much interest will you pay?

- $ P = 421 $
- $ r = 4\% = 0.04 $
- $ t = 9 $

$$
I = 421 \times 0.04 \times 9 = 151.56
$$

✔ Answer: $151.56

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4. If the balance at the end of eight years on an investment of $630 that has been invested at a rate of 9% is $1,083.60, how much was the interest?

We are given:
- Final balance = $1,083.60
- Principal = $630

Interest = Final Balance - Principal

$$
I = 1083.60 - 630 = 453.60
$$

✔ Answer: $453.60

*(Note: This confirms the simple interest calculation: $630 × 0.09 × 8 = 453.60$)*

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5. If you borrow $225 for eight years at an interest rate of 6%, how much interest will you pay?

- $ P = 225 $
- $ r = 6\% = 0.06 $
- $ t = 8 $

$$
I = 225 \times 0.06 \times 8 = 108
$$

✔ Answer: $108

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6. If the balance at the end of eight years on an investment of $230 that has been invested at a rate of 3% is $285.20, how much was the interest?

- Final balance = $285.20
- Principal = $230

$$
I = 285.20 - 230 = 55.20
$$

✔ Answer: $55.20

*(Check: $230 × 0.03 × 8 = 55.20$ — correct)*

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7. How much interest does a $407 investment earn at 6% over seven years?

- $ P = 407 $
- $ r = 6\% = 0.06 $
- $ t = 7 $

$$
I = 407 \times 0.06 \times 7 = 170.94
$$

✔ Answer: $170.94

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8. If you borrow $491 for one year at an interest rate of 3%, how much interest will you pay?

- $ P = 491 $
- $ r = 3\% = 0.03 $
- $ t = 1 $

$$
I = 491 \times 0.03 \times 1 = 14.73
$$

✔ Answer: $14.73

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9. How much interest is earned on a principal of $646 invested at an interest rate of 5% for two years?

- $ P = 646 $
- $ r = 5\% = 0.05 $
- $ t = 2 $

$$
I = 646 \times 0.05 \times 2 = 64.60
$$

✔ Answer: $64.60

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10. How much interest is earned on $470 at 4% for seven years?

- $ P = 470 $
- $ r = 4\% = 0.04 $
- $ t = 7 $

$$
I = 470 \times 0.04 \times 7 = 131.60
$$

✔ Answer: $131.60

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✔ Final Answers:

1. $28.62
2. $405.00
3. $151.56
4. $453.60
5. $108.00
6. $55.20
7. $170.94
8. $14.73
9. $64.60
10. $131.60

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Let me know if you'd like these formatted as a worksheet or need explanations for any specific step!