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Year 10 Simple and Compound Interest Worksheet — Level 3 — Practice Set 3 — Answers

Answer sheet with worked solutions for the Year 10 financial mathematics worksheet.

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Success TutoringWorksheetsAnswer sheetYear 10 · Mathematics · Financial Mathematics

Year 10 Simple and Compound Interest Worksheet — Level 3 — Practice Set 3 — Answers

Show your working. Write the rate as a decimal (5% = 0.05). Round money to the nearest cent.

1.Compare $11,500.00 invested for 3 years at 4.5% per year as simple interest and as interest compounded yearly. How much more does compound interest earn, to the nearest cent?

Answer: $70.91

  1. Simple: I = $11,500.00 × 0.045 × 3 = $1,552.50
  2. Compound: A = $11,500.00 × 1.0453 ≈ $13,123.41, so interest ≈ $1,623.41
  3. Difference = $1,623.41 − $1,552.50 = $70.91
2.Compare $14,250.00 invested for 6 years at 6% per year as simple interest and as interest compounded yearly. How much more does compound interest earn, to the nearest cent?

Answer: $833.90

  1. Simple: I = $14,250.00 × 0.06 × 6 = $5,130.00
  2. Compound: A = $14,250.00 × 1.066 ≈ $20,213.90, so interest ≈ $5,963.90
  3. Difference = $5,963.90 − $5,130.00 = $833.90
3.Compare $2,500.00 invested for 5 years at 2% per year as simple interest and as interest compounded yearly. How much more does compound interest earn, to the nearest cent?

Answer: $10.20

  1. Simple: I = $2,500.00 × 0.02 × 5 = $250.00
  2. Compound: A = $2,500.00 × 1.025 ≈ $2,760.20, so interest ≈ $260.20
  3. Difference = $260.20 − $250.00 = $10.20
4.$9,000.00 is invested at 5% per year, compounded yearly, for 3 years. Find the final amount and the interest earned, to the nearest cent.

Answer: Amount $10,418.63; interest $1,418.63

  1. A = P(1 + r)n = $9,000.00 × (1 + 0.05)3
  2. = $9,000.00 × 1.157625
  3. ≈ $10,418.63
  4. Interest = $10,418.63 − $9,000.00 = $1,418.63
5.Compare $1,250.00 invested for 10 years at 4.5% per year as simple interest and as interest compounded yearly. How much more does compound interest earn, to the nearest cent?

Answer: $128.71

  1. Simple: I = $1,250.00 × 0.045 × 10 = $562.50
  2. Compound: A = $1,250.00 × 1.04510 ≈ $1,941.21, so interest ≈ $691.21
  3. Difference = $691.21 − $562.50 = $128.71
6.$10,250.00 is invested at 6% per year, compounded yearly, for 10 years. Find the final amount and the interest earned, to the nearest cent.

Answer: Amount $18,356.19; interest $8,106.19

  1. A = P(1 + r)n = $10,250.00 × (1 + 0.06)10
  2. = $10,250.00 × 1.790848
  3. ≈ $18,356.19
  4. Interest = $18,356.19 − $10,250.00 = $8,106.19
7.$1,250.00 is invested at 4% per year, compounded yearly, for 6 years. Find the final amount and the interest earned, to the nearest cent.

Answer: Amount $1,581.65; interest $331.65

  1. A = P(1 + r)n = $1,250.00 × (1 + 0.04)6
  2. = $1,250.00 × 1.265319
  3. ≈ $1,581.65
  4. Interest = $1,581.65 − $1,250.00 = $331.65
8.Compare $13,000.00 invested for 10 years at 2% per year as simple interest and as interest compounded yearly. How much more does compound interest earn, to the nearest cent?

Answer: $246.93

  1. Simple: I = $13,000.00 × 0.02 × 10 = $2,600.00
  2. Compound: A = $13,000.00 × 1.0210 ≈ $15,846.93, so interest ≈ $2,846.93
  3. Difference = $2,846.93 − $2,600.00 = $246.93
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