How to Solve Interest Problems: Steps & Examples

Instructions:

Choose an answer and hit 'next'. You will receive your score and answers at the end.

question 1 of 3

As she enters college, Amy puts $500 in a savings account that earns 3.5% simple interest yearly. At the end of 4 years, how much money will be in the account?

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1. Steve is trying to earn $300 in interest for a new guitar. He puts $2500 in an account that earns 2% interest yearly (simple interest). How long will it take to earn $300?

2. Kate is investing $1000 and wants to double it in 8 years. What yearly, simple interest rate will she need to find?

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About This Quiz & Worksheet

There are four steps to solving interest problems, and this quiz/worksheet combo will help you test your understanding of the whole process. These practice questions will ask you to perform calculations using the steps involved.

Quiz & Worksheet Goals

In these assessments, you'll be tested on:

  • Calculating the total amount of money in an account given the interest rate and time the money stays in the account
  • Determining how many years it will take to gain a certain amount of money given the interest rate and original deposit
  • Determining the interest rate needed to gain a certain amount of money over a certain amount of time

Skills Practiced

  • Reading comprehension - ensure that you draw the most important information about interest problems from the related lesson
  • Critical thinking - apply relevant concepts about the interplay between time, interest rates, and balances in order to examine these problems in a different light
  • Problem solving - use your acquired knowledge to solve interest practice problems
  • Knowledge application - use your knowledge to solve interest problems that ask for one of three different answers involving either time, the interest rate itself, or the account balance

Additional Learning

Take a look at the accompanying lesson entitled How to Solve Interest Problems: Steps & Examples to delve deeper into the subject. This lesson covers the following objectives:

  • Define interest, interest rate, and principal
  • Describe the four steps to solving interest problems
  • Understand that this lesson covers simple interest and not compound interest
  • Understand how to answer interest questions asking for one of three possible answers involving time, the interest rate, or the account balance
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