Mastering Simple Interest: Apply and Solve Word Problems

1. Sarah invests $500 in a savings account that earns 4% simple interest per year. How much interest will she earn in 3 years?

• $100

• $60

• $80

• $40

2. John borrows $1,200 from a bank at a simple interest rate of 5% per year. How much total money will he owe after 2 years?

• $1320

• $1500

• $1200

• $1400

3. A car dealership offers a loan of $10,000 at a simple interest rate of 6% for 5 years. What is the total interest paid at the end of the loan period?

• $5000

• $1500

• 3000

• $2000

4. Emily deposits $800 into a fixed deposit account that offers 3% simple interest. How much interest will she earn after 4 years?

• $120

• $72

• $48

• $96

5. Mark wants to save $1,500 for a vacation. If he invests his money at a simple interest rate of 2% per year, how long will it take for him to earn $300 in interest?

• 15 years

• 20 years

• 10 years

• 5 years

6. A company invests $2,000 in a project that yields a simple interest of 7% per year. How much interest will the company earn in 6 years?

• $600

• $1,200

• $1,000

• $840

7. Lisa takes a loan of $900 at a simple interest rate of 8% for 3 years. What is the total amount she will repay at the end of the loan period?

• $1116

• $1200

• $900

• $1080

8. A student saves $1,000 for college and puts it in an account with a simple interest rate of 5% per year. How much interest will he have after 2 years?

• $50

• $100

• $200

• $300

9. Tom invests $2,500 in a bond that pays 4% simple interest annually. How much interest will he earn after 5 years?

• $600

• $250

• $500

• $400

10. A small business takes a loan of $5,000 at a simple interest rate of 10% for 4 years. What is the total interest they will pay by the end of the loan?

• $3,000

• $4,000

• $1,500

• $2,000