Simple Interest

Success Criteria

Learning Intention
1.

To introduce the terms

Interest, Rate, pa and
Deposit.

1.

To be able to understand
terms Interest, rate pa and
Deposit

2.

To show how to calculate the

simple interest for 1 year

2.

Can calculate Simple Interest

for 1 year.

3.

To show how to calculate the

amount after interest is paid

3.

Can calculate Simple Interest

for part of a year

4.

To show how to calculate the

interest for part of a year

What is Interest

If you DEPOSIT money in a bank

account then the bank will pay
you a percentage as INTEREST

The RATE of interest is given as a percentage per annum

per annum is another phrase for per year
John DEPOSITS 200
SCOTIA BANK
rate of interest
3.2% p.a.

Interest ( 1 yr ) =

of

Jill DEPOSITS 600

Interest ( 1 yr ) =

of

How to Calculate Interest ( 1)

The 1st step in all Simple Interest questions is to
calculate the Interest due for 1 year ( annum )
Find the Interest a bank will pay on a Principal
of 400 when the Interest rate is 7.5% p.a.
Interest ( 1 Year ) =

7.5% of 400
=7.5
7.5

= 30

100
%

of
x

400
400

How to Calculate Interest ( 2)

The 1st step in all Simple Interest questions is to
calculate the Interest due for 1 year ( annum )
Find the Interest a bank will pay on a Principal
of 400 when the Interest rate is 7.5% p.a.
Interest ( 1 Year ) =
=
=

7.5% of 400
7.5
100
400

x
100

= 30
7.5% is

7.5

out of

100

400
x 7.5

Calculating Interest for 1 year

(a)

730 at Rate of 2% p.a.

(b)

290 at Rate of 4% p.a.

1000 at Rate of 3.5% p.a. =

(c)
(d)

300 at Rate of 5% p.a.

(e)

880 at Rate of 7% p.a.

(f)

140 at Rate of 8% p.a.

470 at Rate of 10.5% p.a. =

(g)

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Amount in Bank after Interest

Banks automatically add interest to your bank account
AMOUNT = What you had in bank ( Principal ) + Interest
Rate of Interest

10.5%

600

p.a. Money in Bank

Interest(1 yr) =
=

10.5

=
Amount =

=
Original

2.1

Interest

of
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600

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Amount = Principal + Interest

Amount

(a)

140 at Rate of 10.5% p.a. =

(b)

920 at Rate of 8.9% p.a.

(c)

1050 at Rate of 3% p.a.

(d)

720 at Rate of 7.3% p.a.

(e)

450 at Rate of 9.5% p.a.

(f)

800 at Rate of 4% p.a.

(g)

560 at Rate of 1% p.a.

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Interest : Part of a year

Karen deposited 2000 in her bank account in April.
The bank pays a rate of 4% Interest per annum
6 months later she decided to buy a car and asked the
bank teller how much interest she would get

Half of the interest

due for 1 year

Interest for 1 year = 4% of 2000= 80

80 2 = 40

Interest for 6 month =

Total in Bank =

2000 + 40 = 2040

Part of .. Fraction of .

6
12

6
12

part
total

= 6 12 = 0.5 = a half

4 100 x 2000
80

Part of a year
Rate of
Interest

4% p.a.

Deposit

970

for

months

Interest(1 yr) =

As the money is left in for less than a year the Interest paid
will be a fraction of that paid for 1 year
part
Interest

months

970

Setup
Any Month

=
total

6 Months

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4 Months

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Interest : Part of a Year

Interest due

(b) On 2400 at 10.4% for 3 month =

(c)

(a)

On 1320 at 7% for 6 month

On 3600 at 3% for 4 month

(d) On 10320 at 8% for 9 month

(e)

On 7440 at 6% for 2 month

(f)

On 4200 at 9.1% for 1 month =

(g) On 8520 at 4.5% for 8 month =

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3, 4 or 6 Months
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(a)

r = 16 ; s = 65

V=

(b)

r = 7 ; s = 25

V=

(c)

r = 18 ; s = 82

V=

(d)

r = 10 ; s = 26

V=

(e)

r = 12 ; s = 37

V=

(f)

r = 11 ; s = 61

V=

(g)

r = 13 ; s = 85

V=

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