Money Math · Percentages · Lesson Plan
Calculating Interest — Worksheets and Lesson Plan for Teachers
A lesson and printable worksheets on calculating interest using the formula I = P × R × T — practice applying percentages to money in real-world borrowing and saving scenarios. The classic lesson page is free to read; the matching printable worksheets are available with Full Membership.
What Students Learn
Learning objectives
- Key vocabulary: principal (the starting amount), rate (the percentage per year), and time period
- The interest formula: I = P × R × T — and how to plug in values to find an interest amount
- How to calculate interest earned on a savings amount given a principal, rate, and time
- How to calculate interest owed on a borrowed amount — and how the same formula applies to both savings and loans
- How to interpret the result: what the interest dollar amount means relative to the principal
For Teachers
How to use this lesson
This lesson focuses on the mechanics of the interest formula — plugging in values, doing the arithmetic, and interpreting the result. It is worksheet and practice-problem oriented, making it a good follow-up to a conceptual lesson on what interest is and why it matters.
Best used after students have been introduced to the concept of interest — what it is, why it exists, and how it affects saving and borrowing. The banking section has free conceptual lessons on simple and compound interest that make a strong pair with this practice resource.
Works well in math class as a percentages application unit, or in a financial literacy class as reinforcement for a banking or credit lesson. Grades 6–9; adaptable for remediation in Grades 10–11.
Related Banking Lessons
Looking for the conceptual lessons — what interest is, how it works in savings accounts and loans, and how simple interest differs from compound interest? Those are in the Banking section:
What Is Simple Interest? — free lesson + video (Grades 6–12)
What Is Compound Interest? — free lesson + video (Grades 7–12)
This page is the calculation practice resource — use it after the banking concept lessons to give students formula drill and worksheet practice.
Lesson Plan
Calculating interest — full lesson plan
Objective
Students will define principal, interest, rate, and time, and use the formula I = P × R × T to calculate an interest amount.
Key concepts
Interest is an amount of money you earn or pay for the use of money. If you borrow money, you pay interest; if you save money in a savings account, you earn interest.
Principal is the amount of money you start with — the original amount saved or borrowed. The rate is the percentage paid on that money (the percentage a bank pays you for your savings, or the percentage a lender charges you for a loan). Time is how long the money is saved or borrowed.
These combine in the interest formula I = P × R × T (Interest = Principal × Rate × Time). Plug in the values, do the arithmetic, and the result is the interest earned or owed.
Suggested procedure
- Introduce the vocabulary. Define principal, interest, rate, and time with everyday examples.
- Present the formula. Show I = P × R × T and work an example together (e.g. $500 at 4% for 2 years).
- Practice. Students complete the worksheet, applying the formula to both savings and loan scenarios.
- Review. Go over the answers and discuss what the interest amount means relative to the principal.
Materials needed
- The printable Calculating Interest worksheet (below)
- Whiteboard and markers
The lesson content above is free to use. The printable worksheet below is available with Full Membership.
Printable Worksheet · Full Membership
Calculating Interest — Worksheet & Answer Key
A printable worksheet applying the interest formula I = P × R × T to savings and loans — with an answer key for teacher use.
Related Resources
More money math and banking resources
Unlock the full MoneyInstructor library
Members get unlimited access to worksheets, lesson plans, and teacher resources across every financial literacy topic — money math, budgeting, taxes, credit, banking, and more.