Math Practice Online > free > lessons > Florida > 7th grade > Simple Interest

Here are some tips for Simple Interest, which aligns with Florida state standards:

Simple Interest

When you open an account at a bank and put money in the account, the bank gives you a percentage of money based on the amount of money you put in.

The money the bank gives you is called interest. The percentage the bank uses to calculate how much money to give you is called the rate, or interest rate. The amount of money you put into the account is called the principle.

To calculate how much interest you earn, use the formula for simple interest:

Simple Interest = Principle × Rate × Time
which can also be written as I = PRT

Example 1:

Answer the following questions involving simple interest. Input all answers to the nearest dollar
 Interest Rate: 9% each year Starting Balance: \$218Time Passed: 15 years How much interest has accrued if we are using simple interest? What is the new total balance? Interest:   Total balance:
Use the simple interest formula to find the amount of interest earned.
 Interest = Principle × Interest Rate × Time = \$218 × 9% per year × 15 years = \$294.30
 New balance = Original balance + Amount of interest earned = \$218 + \$294.30 = \$512.30
Rounded to the nearest dollar, the answer is   Interest:   Total balance:

Copyright Accurate Learning Systems Corporation 2008.