In these lessons, we will how to solve • word problems that involve a single Simple Interest • word problems that involve more that one Simple Interest. • word problems that involve Simple Interest with discounted loan.
Interest Problems are word problems that use the formula for Simple Interest . There is also another type of interest word problems called Compound Interest Word Problems .
The following tables give the formulas for Simple Interest, Compound Interest, and Continuously Compounded Interest. Scroll down the page for examples and solutions on how to use the Simple Interest Formula.
Simple Interest Word Problems
If you have a saving account, the interest will increase your balance based upon the interest rate paid by the bank.
If you have a loan, the interest will increase the amount you owe based upon the interest rate charged by the bank.
I = prt where I is the interest generated. p is the principal amount that is either invested or owed. r is the rate at which the interest is paid. t is the time that the principal amount is either invested or owed.
This type of word problem is not difficult. Just remember the formula and make sure you plug in the right values. The rate is usually given in percent, which you will need to change to a decimal value.
Word Problems With One Simple Interest
Example 1: John wants to have an interest income of $3,000 a year. Continue reading «Word Problems With More Than One Simple Interest Rate»