6th Grade Math Textbook, Progress

Simple Interest

12-11

I
amount of simple interest

p
principal

r
rate of interest

t
time in years

Polly deposits $7000 at a simple interest

rate of 6.5% for 5 years in her savings

account. Find the interest she will earn.

I
prt

I
$70000.065 5

I
$2275

Polly will earn $2275 interest at the end of

5 years.

Dillon puts $1200 at a simple interest

rate of 7 % for 3 years into his

savings. How much interest will he

earn?

I
prt

I
$12000.0753.5

I
$315

Dillon will earn $315 interest at the end

of 3 years.

1

2

1

2

1

2

Principal (p) is the amount of money borrowed,

or deposited.

Simple Interest (I) is the amount of money to be

paid by the borrower on the principal, or the

amount of money paid to the depositor on the

principal, for a stated period of time, in years. The

rate of interest (r) is the percent of interest paid.

Mr. McPherson borrowed $1000 to be paid back in

3 years. The bank charges a simple interest rate

of 5%. How much interest will Mr. McPherson pay

at the end of 3 years? What will be the total amount

due on the loan?

To find the simple interest due, use the formula

I
prt.

I
prt

I
$10000.05 3

I
$150

Mr. McPherson will pay $150 in simple interest.

To find the total amount due, Amount due
PrincipalSimple Interest

add the principal plus simple 
$1000 $150

interest. 
$1150

The total amount due on Mr. McPherson’s loan will be $1150.

Study these examples.

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