How to find simple interest - PSAT Math
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You really want to buy a car that costs $15,000 but you only have $5,000 saved. Rather than getting a bank loan, your parents offer to lend you the extra money but will require you to pay them back with 4.3% interest. How much will car cost in total after you have paid your parents back?
You really want to buy a car that costs $15,000 but you only have $5,000 saved. Rather than getting a bank loan, your parents offer to lend you the extra money but will require you to pay them back with 4.3% interest. How much will car cost in total after you have paid your parents back?
Tap to reveal answer
Amount borrowed = $15,000 – $5,000 = $10,000
Interest of 4.3% = $10,000 * 0.043 = $430
Total cost of car = $5000 + $10000 + $430 = $15,430
Amount borrowed = $15,000 – $5,000 = $10,000
Interest of 4.3% = $10,000 * 0.043 = $430
Total cost of car = $5000 + $10000 + $430 = $15,430
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Dan took out a $1200 loan at a rate of 3% simple interest a year. What is the amount of interest accrued for one month?
Dan took out a $1200 loan at a rate of 3% simple interest a year. What is the amount of interest accrued for one month?
Tap to reveal answer
$1200 is the amount that he took out.
3% annually would yield an interest amount of $36.
Therefore, each month, he would be paying $3 a month.
$1200 is the amount that he took out.
3% annually would yield an interest amount of $36.
Therefore, each month, he would be paying $3 a month.
← Didn't Know|Knew It →
Peter wanted to buy a car and borrowed $2,500 from the bank at 5% simple interest per year. He was able to pay back the loan in one lump sum at six months. What was the total amount he paid the bank?
Peter wanted to buy a car and borrowed $2,500 from the bank at 5% simple interest per year. He was able to pay back the loan in one lump sum at six months. What was the total amount he paid the bank?
Tap to reveal answer
Simple interest is given by i=prt where i = interest, p = principal, r = rate, and t = time in years.
i=2500cdot (0.05)(0.5)=$62.50
Remember, six months is the same as half of a year. The total paid back to the bank is the principle plus the interest, or $2,562.50.
Simple interest is given by i=prt where i = interest, p = principal, r = rate, and t = time in years.
i=2500cdot (0.05)(0.5)=$62.50
Remember, six months is the same as half of a year. The total paid back to the bank is the principle plus the interest, or $2,562.50.
← Didn't Know|Knew It →
Ted works over the summer and makes $9 per hour. He works for 20 hours each week for 10 weeks. After paying 10% in taxes, he buys a bike for $500 and puts the rest of his money in the bank.
If Ted's bank pays 5% interest on the total sum once per year, and Ted doesn't add or remove anything from the account, how much money (rounded to the nearest cent) will Ted have in 5 years?
Ted works over the summer and makes $9 per hour. He works for 20 hours each week for 10 weeks. After paying 10% in taxes, he buys a bike for $500 and puts the rest of his money in the bank.
If Ted's bank pays 5% interest on the total sum once per year, and Ted doesn't add or remove anything from the account, how much money (rounded to the nearest cent) will Ted have in 5 years?
Tap to reveal answer
To start, we see that Ted works for 20 hours per week for 10 weeks. This means he works a total of 200 hours over the summer. He is paid $9 dollars each hour. Therefore he makes $9 x 200 hours = $1800 total over the summer. He then has to pay 10% in taxes, or .1 x $1800, leaving him with 
. He buys the bike for $500, so he has $1620 - $500 = $1,120 to deposit at the bank.
Now we have to find out how much he will have 5 years later. Since the bank pays 5% interest each year, we know that he will make 5% of what he has each year. He starts with $1,120. 5% of this value is 
. Adding this to the original $1,120 gives us $1,176.
This is also the same as multiplying instead by 1.05. We repeat this step 5 times, giving us:
To start, we see that Ted works for 20 hours per week for 10 weeks. This means he works a total of 200 hours over the summer. He is paid $9 dollars each hour. Therefore he makes $9 x 200 hours = $1800 total over the summer. He then has to pay 10% in taxes, or .1 x $1800, leaving him with
Now we have to find out how much he will have 5 years later. Since the bank pays 5% interest each year, we know that he will make 5% of what he has each year. He starts with $1,120. 5% of this value is
This is also the same as multiplying instead by 1.05. We repeat this step 5 times, giving us:
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I have $100 in my bank. After one year, I have withdrawn a total of $20 and I still have $85 in the bank. What is the yearly interest rate of my bank account?
I have $100 in my bank. After one year, I have withdrawn a total of $20 and I still have $85 in the bank. What is the yearly interest rate of my bank account?
Tap to reveal answer
Since I have withdrawn $20, that means I only have $80 in my account.
imples that
which is 6.25%.
Since I have withdrawn $20, that means I only have $80 in my account.
which is 6.25%.
← Didn't Know|Knew It →
Jane borrows 
dollars from the bank. Her loan has an annual interest rate of 
percent. How much interest will she owe after 
years? (Use a simple interest calculation)
Jane borrows
Tap to reveal answer
Use the simple interest formula:
Interest equals the initial amount multiplied by the annual interest rate multiplied by the number of years:
Let 
= interest owed
Let 
= principal (aka the initial amount of the loan)
Let 
= interest rate
Let 
= years passed
Therefore:
Use the simple interest formula:
Interest equals the initial amount multiplied by the annual interest rate multiplied by the number of years:
Let
Let
Let
Let
Therefore:
← Didn't Know|Knew It →
You really want to buy a car that costs $15,000 but you only have $5,000 saved. Rather than getting a bank loan, your parents offer to lend you the extra money but will require you to pay them back with 4.3% interest. How much will car cost in total after you have paid your parents back?
You really want to buy a car that costs $15,000 but you only have $5,000 saved. Rather than getting a bank loan, your parents offer to lend you the extra money but will require you to pay them back with 4.3% interest. How much will car cost in total after you have paid your parents back?
Tap to reveal answer
Amount borrowed = $15,000 – $5,000 = $10,000
Interest of 4.3% = $10,000 * 0.043 = $430
Total cost of car = $5000 + $10000 + $430 = $15,430
Amount borrowed = $15,000 – $5,000 = $10,000
Interest of 4.3% = $10,000 * 0.043 = $430
Total cost of car = $5000 + $10000 + $430 = $15,430
← Didn't Know|Knew It →
Dan took out a $1200 loan at a rate of 3% simple interest a year. What is the amount of interest accrued for one month?
Dan took out a $1200 loan at a rate of 3% simple interest a year. What is the amount of interest accrued for one month?
Tap to reveal answer
$1200 is the amount that he took out.
3% annually would yield an interest amount of $36.
Therefore, each month, he would be paying $3 a month.
$1200 is the amount that he took out.
3% annually would yield an interest amount of $36.
Therefore, each month, he would be paying $3 a month.
← Didn't Know|Knew It →
Peter wanted to buy a car and borrowed $2,500 from the bank at 5% simple interest per year. He was able to pay back the loan in one lump sum at six months. What was the total amount he paid the bank?
Peter wanted to buy a car and borrowed $2,500 from the bank at 5% simple interest per year. He was able to pay back the loan in one lump sum at six months. What was the total amount he paid the bank?
Tap to reveal answer
Simple interest is given by i=prt where i = interest, p = principal, r = rate, and t = time in years.
i=2500cdot (0.05)(0.5)=$62.50
Remember, six months is the same as half of a year. The total paid back to the bank is the principle plus the interest, or $2,562.50.
Simple interest is given by i=prt where i = interest, p = principal, r = rate, and t = time in years.
i=2500cdot (0.05)(0.5)=$62.50
Remember, six months is the same as half of a year. The total paid back to the bank is the principle plus the interest, or $2,562.50.
← Didn't Know|Knew It →
Ted works over the summer and makes $9 per hour. He works for 20 hours each week for 10 weeks. After paying 10% in taxes, he buys a bike for $500 and puts the rest of his money in the bank.
If Ted's bank pays 5% interest on the total sum once per year, and Ted doesn't add or remove anything from the account, how much money (rounded to the nearest cent) will Ted have in 5 years?
Ted works over the summer and makes $9 per hour. He works for 20 hours each week for 10 weeks. After paying 10% in taxes, he buys a bike for $500 and puts the rest of his money in the bank.
If Ted's bank pays 5% interest on the total sum once per year, and Ted doesn't add or remove anything from the account, how much money (rounded to the nearest cent) will Ted have in 5 years?
Tap to reveal answer
To start, we see that Ted works for 20 hours per week for 10 weeks. This means he works a total of 200 hours over the summer. He is paid $9 dollars each hour. Therefore he makes $9 x 200 hours = $1800 total over the summer. He then has to pay 10% in taxes, or .1 x $1800, leaving him with . He buys the bike for $500, so he has $1620 - $500 = $1,120 to deposit at the bank.
Now we have to find out how much he will have 5 years later. Since the bank pays 5% interest each year, we know that he will make 5% of what he has each year. He starts with $1,120. 5% of this value is . Adding this to the original $1,120 gives us $1,176.
This is also the same as multiplying instead by 1.05. We repeat this step 5 times, giving us:
To start, we see that Ted works for 20 hours per week for 10 weeks. This means he works a total of 200 hours over the summer. He is paid $9 dollars each hour. Therefore he makes $9 x 200 hours = $1800 total over the summer. He then has to pay 10% in taxes, or .1 x $1800, leaving him with
Now we have to find out how much he will have 5 years later. Since the bank pays 5% interest each year, we know that he will make 5% of what he has each year. He starts with $1,120. 5% of this value is
This is also the same as multiplying instead by 1.05. We repeat this step 5 times, giving us:
← Didn't Know|Knew It →
I have $100 in my bank. After one year, I have withdrawn a total of $20 and I still have $85 in the bank. What is the yearly interest rate of my bank account?
I have $100 in my bank. After one year, I have withdrawn a total of $20 and I still have $85 in the bank. What is the yearly interest rate of my bank account?
Tap to reveal answer
Since I have withdrawn $20, that means I only have $80 in my account.
imples that
which is 6.25%.
Since I have withdrawn $20, that means I only have $80 in my account.
which is 6.25%.
← Didn't Know|Knew It →
Jane borrows dollars from the bank. Her loan has an annual interest rate of percent. How much interest will she owe after years? (Use a simple interest calculation)
Jane borrows
Tap to reveal answer
Use the simple interest formula:
Interest equals the initial amount multiplied by the annual interest rate multiplied by the number of years:
Let = interest owed
Let = principal (aka the initial amount of the loan)
Let = interest rate
Let = years passed
Therefore:
Use the simple interest formula:
Interest equals the initial amount multiplied by the annual interest rate multiplied by the number of years:
Let
Let
Let
Let
Therefore:
← Didn't Know|Knew It →
You really want to buy a car that costs $15,000 but you only have $5,000 saved. Rather than getting a bank loan, your parents offer to lend you the extra money but will require you to pay them back with 4.3% interest. How much will car cost in total after you have paid your parents back?
You really want to buy a car that costs $15,000 but you only have $5,000 saved. Rather than getting a bank loan, your parents offer to lend you the extra money but will require you to pay them back with 4.3% interest. How much will car cost in total after you have paid your parents back?
Tap to reveal answer
Amount borrowed = $15,000 – $5,000 = $10,000
Interest of 4.3% = $10,000 * 0.043 = $430
Total cost of car = $5000 + $10000 + $430 = $15,430
Amount borrowed = $15,000 – $5,000 = $10,000
Interest of 4.3% = $10,000 * 0.043 = $430
Total cost of car = $5000 + $10000 + $430 = $15,430
← Didn't Know|Knew It →
Dan took out a $1200 loan at a rate of 3% simple interest a year. What is the amount of interest accrued for one month?
Dan took out a $1200 loan at a rate of 3% simple interest a year. What is the amount of interest accrued for one month?
Tap to reveal answer
$1200 is the amount that he took out.
3% annually would yield an interest amount of $36.
Therefore, each month, he would be paying $3 a month.
$1200 is the amount that he took out.
3% annually would yield an interest amount of $36.
Therefore, each month, he would be paying $3 a month.
← Didn't Know|Knew It →
Peter wanted to buy a car and borrowed $2,500 from the bank at 5% simple interest per year. He was able to pay back the loan in one lump sum at six months. What was the total amount he paid the bank?
Peter wanted to buy a car and borrowed $2,500 from the bank at 5% simple interest per year. He was able to pay back the loan in one lump sum at six months. What was the total amount he paid the bank?
Tap to reveal answer
Simple interest is given by i=prt where i = interest, p = principal, r = rate, and t = time in years.
i=2500cdot (0.05)(0.5)=$62.50
Remember, six months is the same as half of a year. The total paid back to the bank is the principle plus the interest, or $2,562.50.
Simple interest is given by i=prt where i = interest, p = principal, r = rate, and t = time in years.
i=2500cdot (0.05)(0.5)=$62.50
Remember, six months is the same as half of a year. The total paid back to the bank is the principle plus the interest, or $2,562.50.
← Didn't Know|Knew It →
Ted works over the summer and makes $9 per hour. He works for 20 hours each week for 10 weeks. After paying 10% in taxes, he buys a bike for $500 and puts the rest of his money in the bank.
If Ted's bank pays 5% interest on the total sum once per year, and Ted doesn't add or remove anything from the account, how much money (rounded to the nearest cent) will Ted have in 5 years?
Ted works over the summer and makes $9 per hour. He works for 20 hours each week for 10 weeks. After paying 10% in taxes, he buys a bike for $500 and puts the rest of his money in the bank.
If Ted's bank pays 5% interest on the total sum once per year, and Ted doesn't add or remove anything from the account, how much money (rounded to the nearest cent) will Ted have in 5 years?
Tap to reveal answer
To start, we see that Ted works for 20 hours per week for 10 weeks. This means he works a total of 200 hours over the summer. He is paid $9 dollars each hour. Therefore he makes $9 x 200 hours = $1800 total over the summer. He then has to pay 10% in taxes, or .1 x $1800, leaving him with . He buys the bike for $500, so he has $1620 - $500 = $1,120 to deposit at the bank.
Now we have to find out how much he will have 5 years later. Since the bank pays 5% interest each year, we know that he will make 5% of what he has each year. He starts with $1,120. 5% of this value is . Adding this to the original $1,120 gives us $1,176.
This is also the same as multiplying instead by 1.05. We repeat this step 5 times, giving us:
To start, we see that Ted works for 20 hours per week for 10 weeks. This means he works a total of 200 hours over the summer. He is paid $9 dollars each hour. Therefore he makes $9 x 200 hours = $1800 total over the summer. He then has to pay 10% in taxes, or .1 x $1800, leaving him with
Now we have to find out how much he will have 5 years later. Since the bank pays 5% interest each year, we know that he will make 5% of what he has each year. He starts with $1,120. 5% of this value is
This is also the same as multiplying instead by 1.05. We repeat this step 5 times, giving us:
← Didn't Know|Knew It →
I have $100 in my bank. After one year, I have withdrawn a total of $20 and I still have $85 in the bank. What is the yearly interest rate of my bank account?
I have $100 in my bank. After one year, I have withdrawn a total of $20 and I still have $85 in the bank. What is the yearly interest rate of my bank account?
Tap to reveal answer
Since I have withdrawn $20, that means I only have $80 in my account.
imples that
which is 6.25%.
Since I have withdrawn $20, that means I only have $80 in my account.
which is 6.25%.
← Didn't Know|Knew It →
Jane borrows dollars from the bank. Her loan has an annual interest rate of percent. How much interest will she owe after years? (Use a simple interest calculation)
Jane borrows
Tap to reveal answer
Use the simple interest formula:
Interest equals the initial amount multiplied by the annual interest rate multiplied by the number of years:
Let = interest owed
Let = principal (aka the initial amount of the loan)
Let = interest rate
Let = years passed
Therefore:
Use the simple interest formula:
Interest equals the initial amount multiplied by the annual interest rate multiplied by the number of years:
Let
Let
Let
Let
Therefore:
← Didn't Know|Knew It →
You really want to buy a car that costs $15,000 but you only have $5,000 saved. Rather than getting a bank loan, your parents offer to lend you the extra money but will require you to pay them back with 4.3% interest. How much will car cost in total after you have paid your parents back?
You really want to buy a car that costs $15,000 but you only have $5,000 saved. Rather than getting a bank loan, your parents offer to lend you the extra money but will require you to pay them back with 4.3% interest. How much will car cost in total after you have paid your parents back?
Tap to reveal answer
Amount borrowed = $15,000 – $5,000 = $10,000
Interest of 4.3% = $10,000 * 0.043 = $430
Total cost of car = $5000 + $10000 + $430 = $15,430
Amount borrowed = $15,000 – $5,000 = $10,000
Interest of 4.3% = $10,000 * 0.043 = $430
Total cost of car = $5000 + $10000 + $430 = $15,430
← Didn't Know|Knew It →
Dan took out a $1200 loan at a rate of 3% simple interest a year. What is the amount of interest accrued for one month?
Dan took out a $1200 loan at a rate of 3% simple interest a year. What is the amount of interest accrued for one month?
Tap to reveal answer
$1200 is the amount that he took out.
3% annually would yield an interest amount of $36.
Therefore, each month, he would be paying $3 a month.
$1200 is the amount that he took out.
3% annually would yield an interest amount of $36.
Therefore, each month, he would be paying $3 a month.
← Didn't Know|Knew It →