Word Problems & Strategy Chapter 6: Interest

Table of Contents

Print out chapter

The interest, I, earned on the amount, P, of money invested depends on the interest rate, i, and the time, T, the money is invested. This is represented by the equation

I = PiT

The interest would be the dollars earned (or paid), the interest rate is always the annual interest rate (unless otherwise stated), and the time is measured in years. Simple interest means that the interest, I, is determined using the total time period, e.g. 10 years, rather than compounding the interest, that is, adding the interest, I, to the amount, P, after each year.

A student invests $1,000 at 10% for the summer (3 months). How much interest does the student earn?

w Need more help? Tests, classroom prep and tutoring through Veritas GMAT Prep.

Contents of Word Problems Chapter: Table of Contents Chapter 1: Word Problems & Strategies   Chapter 2: 5-Step Method   Chapter 3: Functions & Symbols   Chapter 4: Progressions & Sequences   Chapter 5: Percentages   Chapter 6: Interest, Discount & Markups   Chapter 7: Ratio & Proportion   Chapter 8: Uniform Motion   Chapter 9: Work & Rate   Chapter 10: Grouping & Counting   Chapter 11: Data Interpretation   Chapter 12: Averages & Mean   Ratio & Proportion

w Have a question or a problem? Contact us.