Grade 7 Simple interest Worksheets

Understanding simple interest

Simple interest is the extra money earned or paid on a sum, calculated only on the original amount. At Grade 7 learners use the formula interest equals principal times rate times time, where the rate is written as a decimal and the time is in years. Simple interest does not compound, so the same amount is added each year.

For a principal of $200 at a rate of 5% for 3 years, write the rate as 0.05, then multiply 200 × 0.05 × 3 to get $30 of interest, making the total $230. A common mistake is to leave the rate as a whole number 5 instead of 0.05, inflating the answer a hundredfold, or to forget to multiply by the time. A helpful tip is to convert the percentage rate to a decimal first, then multiply all three quantities together, and finally add the interest to the principal only if the question asks for the total.