Finding the interest and future value of a simple interest loan or investment

Two-part: compute the simple interest, then add it to the principal to find what the account is worth later.

01 Mini-Lesson Video

▸ VIDEO COMING SOON

A short walkthrough explaining what you need to know and how to solve this question type lands here once it's recorded.

02 What This Looks Like on ALEKS

ALEKS randomizes the numbers each attempt, but the question shape stays the same. Here are three example versions you might see.

Carlos v1

Carlos deposits $3,000 into an account that pays simple interest at an annual rate of 5%. He does not make any more deposits. He makes no withdrawals until the end of 5 years when he withdraws all the money.

(a) How much total interest will Carlos earn?
(b) What will the total amount in the account be (including interest)?

Maria v2

Maria deposits $5,000 into an account that pays simple interest at an annual rate of 4%. She does not make any more deposits. She makes no withdrawals until the end of 7 years when she withdraws all the money.

(a) How much total interest will Maria earn?
(b) What will the total amount in the account be (including interest)?

Eric v3

Eric deposits $1,500 into an account that pays simple interest at an annual rate of 6.5%. He does not make any more deposits. He makes no withdrawals until the end of 4 years when he withdraws all the money.

(a) How much total interest will Eric earn?
(b) What will the total amount in the account be (including interest)?

Heads up: Your ALEKS version will use different numbers. The numbers in the practice below are different too — that way you're exercising the move, not memorizing one answer.

03 How to Solve It

I = P × r × t
A = P + I

Simple interest: multiply the three inputs to get I, then add it back to the principal to get A.

Name the four pieces.

P = $3,000 (Carlos's deposit). r = 0.05 (5% as a decimal). t = 5 (years). The question asks for I in part (a) and A in part (b).

Compute the interest (part a).

Plug into I = Prt. All three pieces are given, no fractions to convert.

I = 3,000 \times 0.05 \times 5 = $750.00

Compute the future value (part b).

Add the interest you just computed to the original principal. ALEKS labels this the "total amount in the account."

A = 3,000 + 750 = $3,750.00

Sanity check: 5% of $3,000 is $150 per year. Over 5 years, $750 of interest. Looks right.

▸ COMMON SLIPS(1) Used 5 instead of 0.05. If you got $75,000 in part (a), you skipped the percent-to-decimal step. (2) Stopped at I. If you wrote $750 for part (b), you forgot to add the principal back. A is principal + interest, always.

04 Practice — Step by Step

Try a different scenario. Same recipe — find the interest first, then the total.

Compute the interest.

Maria deposits $5,000 at 4% simple annual interest for 3 years. How much interest does she earn?

I = $

Compute the total amount.

Same scenario as above. What's the total amount in Maria's account after 3 years?

A = $

Reverse: solve for the rate.

A $4,000 deposit earned $1,200 in simple interest over 6 years. What annual rate did the account pay? Type just the number (e.g. 4 for 4%).

r =

▸ NICE WORK

You've walked through the whole problem.

That's the move. ALEKS will give you a different version with different numbers — but the steps are the same.

Topic overview Q2