Simple Interest

Learning about money is incredibly interesting because it is a crucial subject that is used throughout life. Children are taught about money denominations, unit conversions, profit and loss, and the unitary method under the topic of money. Simple interest is an important concept that is introduced in the primary grades.

This teaching guide aims at explaining the important concept of simple interest with the help of an animated cartoon story, bright posters, colourful worksheets, and even an interesting activity to better comprehend the concept.

When we borrow money from a bank, we also have to pay a fee. Interest is the term for the additional cost we pay. This is also charged on borrowed funds by some financial organisations and moneylenders.

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There are a few terms related to simple interest that are very important to understand the topic well. Following are the terms used to determine this.

Principal :

The sum that was first borrowed (loaned) from the bank or invested is referred to as the principal.  The principal is denoted by P.

Rate :

Rate is the interest rate at which the main sum is loaned to someone for a specific period of time; it may be 5%, 10%, 13%, etc. The rate is denoted by R.

Time :

Time is the duration for which the principal amount is given to someone. Time is denoted by T.

Simple interest is determined by using the formula :


S.I. is simple interest, P is the principal amount, T is the time and R is the rate.

The above formula is further used to determine the variables like principal, amount,  time, and rate also.

Amount :

When someone borrows money from a bank, they are required to pay it back, and the sum of money that is paid back is known as the Amount which includes the money borrowed (principal) and the extra sum of money charged on the loan (interest).

Amount = Principal + Simple Interest

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Teaching simple interest  with kid-friendly, clear, and easy-to-understand posters from Uncle Math School by Fun2Do Labs


Ignite kids’ curiosity with engaging stories for role play and skits, making the learning of this concept an exciting and effective experience. Teaching simple interest  through stories from Uncle Math School by Fun2Do Labs :

Text of Stories


Learning simple interest can be made enjoyable by incorporating interactive games and activities.

Interest Puzzle Time!

This is an entertaining puzzle game to engage children and teach them how to use the basic interest formula. This activity can be carried out in the following steps :

  1. Make puzzle cards, mentioning the principal, rate, and time.
  2. Children need to arrange puzzle cards by joining the correct value of the interest (S.I.) for given values of principal (P), rate (R), and time (T) by using the following formula : 


Help your kids practise simple interest  with interesting and engaging fun worksheets and solutions from Uncle Math by Fun2Do Labs.

Worksheet 309 : Word Problems
Solution 309 : Word Problems
Worksheet 311 : Simple Interest
Solution 311 : Simple Interest
Worksheet 312 : Simple Interest Word Problems
Solution 312 : Simple Interest Word Problems

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