About this video
How simple interest works, where the same amount is earned each period on the original amount, using the formula A = P(1 + in).
What it covers
- The simple interest formula A = P(1 + i·n)
- Identifying P, i and n
- Finding the total amount and the interest earned
Extra worked examples
✍️ Extra example: R2000 at 8% simple interest for 3 years
- 1Write the formula: A = P(1 + i·n).Simple interest grows by the same amount each year.
- 2Substitute: A = 2000(1 + 0.08 × 3) = 2000(1.24).i = 0.08, n = 3.
- 3A = R2480, so interest = R480.Total minus the original R2000.
Exercises to try
Work each one out, then click to reveal the answer.
- 1R1000 at 10% simple interest for 2 years — total?
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1000(1 + 0.10×2) = 1000(1.2) = R1200 - 2How much interest on R5000 at 6% for 4 years?
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5000 × 0.06 × 4 = R1200 - 3R800 grows to R960 in 2 years. Find the rate.
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Interest = R160; 160 = 800 × i × 2 → i = 0.10 = 10%
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