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Meaning of interest: interest means the extra money that you [ay back when ypu borrow money that you receive when you invest money.

EXAMPLE 1

find the simple interest on $1,000 for 5 years at 3% per annum.

SOLUTION

Principal = $1,000 (the amount borrowed

Time = 5 years (the period for which the money is borrowed before it is paid back in full)

Rate = 3% (extra money paid)

 

Simple interest = P  x R x T

100

 

= 1,000 x 3 x 5

                                  100

= 10 x 3 x 5 = $150

 

 

EXAMPLE 2

 

Seun deposit $14,500 in a savings Bank account at UBA which pays an interest rate of 15% per annum for 2 ½ years. What is the simple interest?

 

Solution

Principal = $14,500

Rate= 15%

Time= 2 ½ or 2.5 years

SI = P x  R x T

100

= 14500 x 15 x 2.5 = 145 x 15 x 2.5 = $5, 437.50

100

          

EXERCISE

 

Copy and complete the table

S/NPrinciplalRateTimeSimple interest
1.$23,00           5%       4 years
2.$19,000           6%       7 years
3.$28,000           3%       2 years
4.$30,000           4%    $6,000

 

See also

MONEY: PROFIT AND LOSS

SIMPLE PROBLEMS ON PERCENTAGES

RATIO AND PERCENTAGE

PROFIT AND LOSS

PROBLEM ON MULTIPLICATION OF MONEY

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