# Solved examples on Simple Interest

In this section I have solved examples on simple interest. By referring these you can solve your questions.

Examples :

1) Dick takes a loan of $8,000 to buy a used truck at the rate of 9 % simple Interest.Calculate the annual interest to be paid for the loan amount. Solution: From the details given in the problem Principle = P =$8,000 and R = 9% or 0.09 expressed as a decimal.

As the annual Interest is to be calculated, the time period T =1.

Plugging these values in the simple Interest formula,

I = P x T x R

= 8,000 x 1 x 0.09

= 720.00

Annual Interest to be paid = $720 ________________________________________________________________ 2) Steve invested$ 10,000 in a savings bank account that earned 2% simple interest. Find the interest earned if the amount was kept in the bank for 4 years.

Solution:
Principle P = $10,000 Time Period T =4 years and Rate of Interest = 2% = 0.02 Plugging these values in the simple Interest formula, I = PX T X R = 10,000 X 4 x 0.02 =$ 800

Interest earned for the investment = $800 ________________________________________________________________ 3) Ryan bought$ 15,000 from a bank to buy a car at 10% simple Interest. If he paid $9,000 as interest while clearing the loan, find the time for which the loan was given. Solution : Principle =$ 15,000 Rate of Interest R = 10% = 0.10 and the Interest paid = I = $9,000. And T is to be found. T = I/(PR) = 9000/(15,000 x 0.10) = 6 years. The loan was given for 6 years. ________________________________________________________________ Solved examples on Simple Interest 4) In how much time will the simple interest on$3,500 at the rate of 9% p.a be the same as simple interest on $4,000 at 10.5% p.a for 4 years? Solution : S.I on$4,000 at rate 10.5% = 10.5/100 = 0.105 for 4 years

S.I = ( P x R x T) /100

= 4000 x 0.105 x 4

S.I = $1,680 The interest of$1,680 is the same as that on \$3,500 at 9% p.a for suppose 't' years.

S.I x 100
Time = t = ------------
P x R

1680 x 100
Time = t = ------------
3500 x 9

168,000
Time = t = ------------
31,500

Time = t = 5.33years.

Simple Interest (S.I)

Finding rate when Principal and time are given
Finding time when Principal and rate are given
Solved examples on Simple Interest
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