Solving Interest Problems Lesson Plan

Instructor: Tammy Galloway

Tammy teaches business courses at the post-secondary and secondary level and has a master's of business administration in finance.

Learning how to solve interest problems can seem complicated, but this lesson simplifies each step for easy comprehension. Students will explore interest calculation as they watch a video, complete an activity, and take a quiz to ensure understanding.

Learning Objectives

After this lesson students will be able to:

  • define and discuss the correlation between principle, interest, and time
  • state and describe the interest formula
  • solve interest word problems


60 minutes

Curriculum Standards

  • CCSS.ELA-Literacy.RH.11-12.4

Determine the meaning of words and phrases as they are used in a text, including analyzing how an author uses and refines the meaning of a key term over the course of a text (e.g., how Madison defines faction in Federalist No. 10).

  • CCSS.ELA-Literacy.RH.11-12.5

Analyze in detail how a complex primary source is structured, including how key sentences, paragraphs, and larger portions of the text contribute to the whole.

  • CCSS.ELA-Literacy.RH.11-12.7

Integrate and evaluate multiple sources of information presented in diverse formats and media (e.g., visually, quantitatively, as well as in words) in order to address a question or solve a problem.



  • Ask students if they would loan a large sum of money to someone interest-free; why or why not? Assess their existing knowledge of interest, and briefly define the term.
  • Explain that they will explore interest and learn how to solve interest problems.
  • Distribute hard copies of the How to Solve Interest Problems: Steps & Examples lesson. Start the video and pause at 1:54, then ask:
    • What does 'principle' mean in terms of interest?
    • Can you state the formula to find interest? What are the formula's components?
  • Resume the video, and pause at 3:34.
    • Shoulder pair students and instruct them to calculate how much interest Karen will earn in three years, using the hard copies of the lesson and calculators/smart devices.
    • Students must write the formula and steps.
    • When all pairs are finished, allow them to share their steps and answers.
  • Finish playing the video. Have students write the steps and calculate time and the interest rate in the lesson. Allow them to share the steps and calculations, and ask:
    • How does time impact interest and principle?
  • Distribute the lesson quiz and ask students to complete independently. Review quizzes and provide additional guidance as needed.

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