Money maths · lesson 23 of 30 · free

Simple interest — Money maths for kids

Money in a piggy bank stays the same. Money in a bank savings account earns interest — the bank pays you for keeping it there. With simple interest, I = P × R × T ÷ 100, where P is the money put in, R the rate per year and T the years.

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The method

P × R × T ÷ 100 — “principal × rate × time in years, divided by 100”

  1. Interest I = P × R × T ÷ 100.
  2. Amount after T years = P + I.
  3. Turn it round: R = I × 100 ÷ (P × T) and T = I × 100 ÷ (P × R).

Use it for: Understanding savings accounts, comparing a piggy bank with a bank, and simple interest in Class 7–8.

🧮 Check your own sums with the free Simple interest calculator — it shows the working.

Worked example: Diya keeps ₹1500 in a bank at 4% simple interest per year. How many rupees of interest does it earn in 3 years? → 180

  1. I = 1500 × 4 × 3 ÷ 100.
  2. 1500 × 12 = 18000, and 18000 ÷ 100 = 180.

Check: One year gives 4% of 1500 = 60, and 3 × 60 = 180 ✓

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✓ Written and checked by the TalentJR team · Updated 13 Oct 2026 · How we make our lessons

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🏁 Lesson 23 test

20 sums. Check each answer, then go to the next one. Get 16 or more right to pass.

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🖨️ Simple Interest Worksheet for Kids

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