Meaning of interest: interest means the extra money that you [ay back when ypu borrow money that you receive when you invest money.
EXAMPLE 1
find the simple interest on $1,000 for 5 years at 3% per annum.
SOLUTION
Principal = $1,000 (the amount borrowed
Time = 5 years (the period for which the money is borrowed before it is paid back in full)
Rate = 3% (extra money paid)
Simple interest = P x R x T
100
= 1,000 x 3 x 5
100
= 10 x 3 x 5 = $150
EXAMPLE 2
Seun deposit $14,500 in a savings Bank account at UBA which pays an interest rate of 15% per annum for 2 ½ years. What is the simple interest?
Solution
Principal = $14,500
Rate= 15%
Time= 2 ½ or 2.5 years
SI = P x R x T
100
= 14500 x 15 x 2.5 = 145 x 15 x 2.5 = $5, 437.50
100
EXERCISE
Copy and complete the table
| S/N | Principlal | Rate | Time | Simple interest |
| 1. | $23,00 | 5% | 4 years | |
| 2. | $19,000 | 6% | 7 years | |
| 3. | $28,000 | 3% | 2 years | |
| 4. | $30,000 | 4% | $6,000 |
See also