Simple Interest and Problems Involving Saving
Primary 6 · Mathematics
Simple Interest and Problems Involving Saving
Lesson 3 of 5
15 min
Let's begin
Uwase kept 50 000 Frw in her SACCO for one year and received 3 000 Frw interest. Her friend's bank paid 4%. Uwase wants to know whether her SACCO paid more. She knows the interest, but not the rate. Can she work it out?
Start from I = P × R × T ÷ 100. Multiply both sides by 100:
I × 100 = P × R × T
Now whichever number you want is found by dividing I × 100 by the other two:
Worked example 1
Uwase: I = 3 000 Frw, P = 50 000 Frw, T = 1 year.
R = 3 000 × 100 ÷ (50 000 × 1) = 300 000 ÷ 50 000 = 6%.
6% is more than 4%, so her SACCO paid the better rate.
Worked example 2
What principal earns 4 800 Frw in 2 years at 8% per year?
P = 4 800 × 100 ÷ (8 × 2) = 480 000 ÷ 16 = 30 000 Frw.
Check: 30 000 × 8 × 2 ÷ 100 = 4 800. Correct.
Worked example 3
How long will it take 40 000 Frw at 5% per year to earn 6 000 Frw?
T = 6 000 × 100 ÷ (40 000 × 5) = 600 000 ÷ 200 000 = 3 years.
Worked example 4
(an answer in months). 60 000 Frw at 10% per year earned 2 500 Frw. For how long was it saved?
T = 2 500 × 100 ÷ (60 000 × 10) = 250 000 ÷ 600 000 = 512 of a year. 512 × 12 months = 5 months.
Worked example 5
A loan of 200 000 Frw grew to 236 000 Frw after 2 years. What was the rate?
Step 1: find the interest first. I = A − P = 236 000 − 200 000 = 36 000 Frw.
Step 2: R = 36 000 × 100 ÷ (200 000 × 2) = 3 600 000 ÷ 400 000 = 9% per year.
Be careful: 36 000 is 18% of 200 000, but that is for 2 years together. The rate per year is 9%.
Tip
Interest × 100, then divide by the other two. Always check your answer by putting it back into I = P × R × T ÷ 100.
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Quick check
Mugisha kept 20 000 Frw in a SACCO for 1 year and earned 1 400 Frw interest. What was the rate?
