Lesson 7: Simple Interest — Practice Questions

1. 1. Calculate the simple interest earned on a principal of $600 at an annual interest rate of 4% for 5 years. The interest is ___ dollars.

2. 2. What is the simple interest on a principal of $2,000 at an annual rate of 3.5% for 4 years?

   • A. 280 dollars
   • B. 28 dollars
   • C. 2,800 dollars
   • D. 70 dollars

3. 3. Find the simple interest on an investment of $1,500 at an annual rate of 5% for 18 months. The interest is ___ dollars.

4. 4. To calculate simple interest for a rate of 6% per year, which value should be substituted for $r$ in the formula $I = Prt$?

   • A. 0.06
   • B. 6
   • C. 0.6
   • D. 0.006

5. 5. A principal of $10,000 is invested at a simple annual interest rate of 2.2% for 3 years. The interest earned is ___ dollars.

6. 6. David invests $\$1,000$ at a simple annual interest rate of 5%. How many years will it take for him to earn $\$200$ in interest? The time is $\_\_\_$ years.

7. 7. An investment of $\$2,000$ for 4 years earns $\$320$ in simple interest. What is the annual interest rate?

   • A. 2%
   • B. 3%
   • C. 4%
   • D. 5%

8. 8. A loan generated $\$180$ in simple interest over 2 years at an annual rate of 6%. What was the original principal amount of the loan, in dollars? The principal was $\$\_\_\_$.

9. 9. Ken invests $\$800$ at a 3% annual simple interest rate. He wants to earn $\$72$ in interest. Which equation correctly models the time, $t$, it will take?

   • A. $72 = 800 \cdot 0.03 \cdot t$
   • B. $800 = 72 \cdot 0.03 \cdot t$
   • C. $72 = 800 \cdot 3 \cdot t$
   • D. $72 = (800 + 72) \cdot 0.03 \cdot t$

10. 10. A savings account earned $\$450$ in simple interest over 5 years with an annual interest rate of 3%. How much was the initial principal, in dollars? The principal was $\$\_\_\_$.