Solving simple arithmetic word problems is one of the challenges in Natural Language Understanding. This paper presents a novel method to learn to use formulas to solve simple arithmetic word problems. Our system, analyzes each of the sentences to identify the variables and their attributes; and automatically maps this information into a higher level representation. It then uses that representation to recognize the presence of a formula along with its associated variables. An equation is then generated from the formal description of the formula. In the training phase, it learns to score the <formula, variables> pair from the systematically generated higher level representation. It is able to solve 86.07% of the problems in a corpus of standard primary school test questions and beats the state-of-the-art by a margin of 8.07%.