Simple interest

There is a formula for simple interest

I = PRT

where

• I = interest
• P = amount borrowed (called “Principal”)
• R = interest rate
• T = time

Interest is the amount charged on the money (Principal) borrowed from the bank in a specified period of time, T.

Example 1

A trader put sh. 50.000 in the bank for one year. If the interest Rate was 30%, how much money did he get as interest?

Example 2

John banked Shs. 150,000 on his account for 2 years at the rate of 5% simple interest. How much interest did he earn?

For additional revision questions download PDF below

Simple interest- upper primary

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