Compute simple interest and resulting balances.
Free, timed SHSAT practice sets on simple interest— every question includes a full worked explanation, and there's no account required.
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Simple interest is the same amount every year. It is based only on the money you put in at the start (the principal).
\(I = P \times r \times t\)
Example: 2,500 dollars at 3% for 4 years earns \(2500 \times 0.03 \times 4 = 300\) dollars of interest, so the balance is 2,800 dollars.
Traps:
Simple interest \(I = P r t = \$1000.00 \times 3/100 \times 3 = \$90.00\); balance \(= P + I = \$1090.00\). (Forgetting to multiply by the number of years gives $30.00. Adding the interest to the deposit (the balance) gives $1090.00. Using \(0.3\) instead of \(0.03\) for the rate gives $900.00.) The interest earned is $90.00.
Simple interest \(I = P r t = \$5100.00 \times 8/100 \times 6 = \$2448.00\); balance \(= P + I = \$7548.00\). (Stopping at the interest gives $2448.00. Adding only one year of interest gives $5508.00. Using \(0.8\) instead of \(0.08\) for the rate gives $29580.00.) The balance after 6 years is $7548.00.