Numerical Reasoning and Ability
Topic: Interest Problems
CIVIL
SERVICE
REVIEW
John Paul L. Hablado
Mathematics, Science and Professional Education Instructor Guimaras State College
Simple Interest
Formula
I = PRT
I = PRT
• I = interest earned (amount of money the
bank pays you)
• P = Principal amount invested or
borrowed.
• R = Interest Rate usually given as a
percent (must changed to decimal before
plugging it into formula)
• T = Time (must be measured in years) or
converted to years by dividing by 12 months
Converting
• Change % to decimal
Answers
1) 12%
.12 Move 2 places
2) 5%
.05 to left & drop % sign
3) 2½%
.025
4) 8.5%
.085
• Change from decimal to %
5) 9.8%
.098
6) 45.5%
.455
Move 2 places
to right & add % sign
I = PRT
Solve for one of variables:
• Solving for other
I variables
• Plug in numbers
what you for
know.
P, R, & T.
• Multiply
Then multiply
the numbers that are on
same side then divide by that
answer.
1. A savings account is set up so that the simple interest earned on the
investment is moved into a separate account at the end of each year. If
an investment of ₱ 5,000 is invested at 4.5%, what is the total simple
interest accumulated in the checking account after 2 years.
• I = PRT • Interest paid by
• I=(5,000)(.045)(2) bank is unknown
• I=₱ 450 • Principal (invested)
• Rate changed to
decimal
• Time is 2 years
• Multiply
2. A savings account is set up so that the simple interest earned on the
investment is moved into a separate account at the end of each year. If
an investment of ₱ 7,000 is invested at 7.5%, what is the total simple
interest accumulated in the checking account after 3 years.
• I = PRT • Interest paid by
• I=(7,000)(.075)(3) bank is unknown
• I= ₱ 1,575 • Principal (invested)
• Rate changed to
decimal
• Time is 3 years
• Multiply
3. When invested at an annual interest rate of 6% an account
earned ₱ 180.00 of simple interest in one year. How much
money was originally invested in account?
• Interest
I = PRT paid by bank
180=P (.06)
• Principal (1)
(invested) is unknown
• Rate
180 =changed
.06P to decimal
• Time
.06 is.06
1 year
•₱ Multiply
3,000 = P
• Divide
4. When invested at an annual interest rate of 7% an account
earned ₱ 581.00 of simple interest in one year. How much
money was originally invested in account?
• Interest
I = PRT paid by bank
581=P (.07)
• Principal (1)
(invested) is unknown
• Rate
581 =changed
.07P to decimal
• Time
.07 is.07
1 year
•₱Multiply
8,300 =P
• Divide
5. A savings account is set up so that the simple interest earned on
the investment is moved into a separate account at the end of each
year. If an investment of ₱ 7,000 accumulate ₱ 910 of interest in the
account after 2 years, what was the annual simple interest rate on
the savings account?
• I = PRT • Interest paid by
• 910=(7,000)(R)(2) bank
• 910 = (7,000)(2)R• Principal(invested)
• 910 = 14,000 R • Rate is unknown
14,000 14,000 • Time is 2 years
0.065 = R • Regroup & Multiply
6.5% = R • Divide
• Change to %
6. A savings account is set up so that the simple interest earned on
the investment is moved into a separate account at the end of each
year. If an investment of ₱ 2,000 accumulate ₱ 360 of interest in the
account after 4 years, what was the annual simple interest rate on
the savings account?
• I = PRT • Interest paid by
• 360=(2,000)(R)(4) bank
• 360 = (2,000)(4)R• Principal (invested)
• 360 = 8,000 R • Rate is unknown
8,000 8,000 • Time is 4 years
0.045 = R • Regroup & Multiply
4.5% = R • Divide
• Change to %
7. Sylvia bought a 6-month ₱ 1900 certificate of deposit. At the end
of 6 months, she received a ₱ 209 simple interest. What rate of
interest did the certificate pay?
• I=PRT • Interest paid by
209=1900(R) (6/12) bank
• Principal
209=(1900)(6/12)R
(invested)
209=950R
• Rate is unknown
950 950
• Time is 6
0.22 = R months
22% = R (divide by 12)
• Regroup &
Multiply
• Divide
8. An investment earns 4.5% simple interest in one year. If
the money is withdrawn before the year is up, the interest is
prorated so that a proportional amount of the interest is paid
out. If ₱ 2400 is invested, what is the total amount that can
be withdrawn when the account is closed out after 2 months?
• I=PRT • Interest paid by
• I=(2400)(.045)(2/12) bank - Unknown
• Principal (invested)
I= ₱ 18 • Rate is .045
• Time is 2 months
₱ 18 + ₱ 2400 = ₱ 2418
(divide by 12)
• Multiply
₱ 2418 will be withdrawn. • Now, since the money
is being withdrawn,
add the interest to the
principal.
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