Question 1Warm-upFoundation
£500 is invested at 4% simple interest per year. How much interest is earned in 1 year?
4% of 500.
Worked solution
Answer: £20
GCSE & IGCSE maths practice
Simple interest questions and answers
With simple interest, you earn the same amount of interest every year, worked out on the original amount: interest = amount × rate × years. (With compound interest, interest is also paid on earlier interest.) The questions also work backwards to find the rate, time or amount invested.
8 questions · Foundation tier · Every answer is checked as you type it, with a full worked solution. Updated .
Where simple interest comes up
| GCSE (AQA, Edexcel, OCR) | Foundation and Higher: simple interest in financial mathematics. |
|---|---|
| Cambridge IGCSE (0580) | Core and Extended: calculate with simple and compound interest (formulas are not given). |
The method
- Interest for one year = amount × rate (as a decimal).
- Total interest = one year's interest × number of years.
- Total amount = original + interest.
- Rate = interest ÷ (amount × years).
Simple interest questions
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Warm-up
Question 2Warm-upFoundation
£500 is invested at 4% simple interest per year. How much interest is earned in 3 years?
£20 each year.
Worked solution
Answer: £60
Exam-style
Question 3Exam-styleFoundation
£1200 is invested at 2.5% simple interest for 4 years. What is the total amount at the end?
Interest = 1200 × 0.025 × 4.
Worked solution
- Interest
- Total
Answer: £1320
Question 4Exam-styleFoundation
£1500 earns £90 simple interest over 3 years. What is the annual interest rate?
£30 a year.
Worked solution
- per year
Answer:
Question 5Exam-styleFoundation
How many years does it take £800 at 5% simple interest to earn £200?
£40 a year.
Worked solution
- per year
- years
Answer: years
Question 6Exam-styleFoundation
£2000 is invested at 3.5% simple interest per year for 6 months. How much interest is earned?
6 months = 0.5 years.
Worked solution
Answer: £35
Challenge
Question 7ChallengeFoundation
£1000 is invested for 3 years at 5% per year. How much more interest does compound interest earn than simple interest? Give your answer to the nearest penny.
Simple: £150. Compound: 1000 × 1.05³ − 1000.
Worked solution
- Simple:
- Compound:
- Difference: £7.63
Answer: £7.63
Question 8ChallengeFoundation
How much must be invested at 3% simple interest to earn £300 in 5 years?
£60 a year needed.
Worked solution
- per year
Answer: £2000
Common mistakes
- Adding interest on the interest (that's compound interest).
- Using 4 instead of 0.04 for 4%.
- Forgetting to convert months to years.
Stuck on one of these?
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Sources
The questions are our own. The “where it comes up” notes are from each board's published specification, checked on 26 October 2026:
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