Here are some examples of simple interest problems, along with solutions:

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1. Basic Simple Interest Calculation

Problem:
If $1000 is invested at a rate of 5% per year for 3 years, what will the simple interest be?

Solution:
The formula for simple interest is: $\text{Simple Interest (SI)} = \frac{P \times R \times T}{100}$ Where:

• $P$ = Principal (initial investment)
• $R$ = Rate of interest per year
• $T$ = Time in years

Plugging in the values: $SI = \frac{1000 \times 5 \times 3}{100} = 150$

Answer: The simple interest earned is $150.

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2. Finding Total Amount After Interest

Problem:
How much will $2000 amount to after 4 years at a simple interest rate of 6% per year?

Solution:
First, find the simple interest: $SI = \frac{2000 \times 6 \times 4}{100} = 480$

Then, calculate the total amount: $\text{Total Amount (A)} = P + SI = 2000 + 480 = 2480$

Answer: The total amount after 4 years will be $2480.

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3. Finding Principal When Simple Interest is Known

Problem:
An amount earns $250 as simple interest over 5 years at a rate of 5% per year. What was the initial investment (principal)?

Solution:
Using the simple interest formula, rearrange to find $P$: $P = \frac{SI \times 100}{R \times T}$

Plugging in the values: $P = \frac{250 \times 100}{5 \times 5} = 1000$

Answer: The principal (initial investment) was $1000.

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4. Finding Interest Rate

Problem:
A principal of $1200 grows to $1440 in 3 years under simple interest. What was the interest rate?

Solution:

1. Find the simple interest: $SI = A - P = 1440 - 1200 = 240$

2. Use the simple interest formula to solve for $R$: $R = \frac{SI \times 100}{P \times T} = \frac{240 \times 100}{1200 \times 3} = 6\%$

Answer: The interest rate was 6% per year.

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5. Finding Time Required to Earn a Specific Interest

Problem:
How many years will it take for a principal of $500 to earn $150 at a simple interest rate of 10% per year?

Solution:
Rearrange the simple interest formula to find $T$: $T = \frac{SI \times 100}{P \times R}$

Plugging in the values: $T = \frac{150 \times 100}{500 \times 10} = 3$

Answer: It will take 3 years to earn $150 in interest.

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Would you like more details on any specific example or topic? Here are some questions to expand on this information:

1. How is simple interest different from compound interest?
2. Can you use simple interest formulas in situations with non-annual compounding periods?
3. How would the calculations change if interest were paid monthly instead of yearly?
4. What are the practical applications of simple interest in real-life situations?
5. How do you calculate the time period if the interest rate is provided in months?

Tip: Always double-check the units (e.g., years, months) when calculating time in interest problems.