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Year 10 Simple and Compound Interest Worksheet — Level 3 — Practice Set 4 — 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 4 — Answers

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

1.$7,500.00 is invested at 3% per year, compounded yearly, for 8 years. Find the final amount and the interest earned, to the nearest cent.

Answer: Amount $9,500.78; interest $2,000.78

  1. A = P(1 + r)n = $7,500.00 × (1 + 0.03)8
  2. = $7,500.00 × 1.26677
  3. ≈ $9,500.78
  4. Interest = $9,500.78 − $7,500.00 = $2,000.78
2.Compare $14,000.00 invested for 6 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: $451.64

  1. Simple: I = $14,000.00 × 0.045 × 6 = $3,780.00
  2. Compound: A = $14,000.00 × 1.0456 ≈ $18,231.64, so interest ≈ $4,231.64
  3. Difference = $4,231.64 − $3,780.00 = $451.64
3.Compare $7,750.00 invested for 4 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: $174.20

  1. Simple: I = $7,750.00 × 0.06 × 4 = $1,860.00
  2. Compound: A = $7,750.00 × 1.064 ≈ $9,784.20, so interest ≈ $2,034.20
  3. Difference = $2,034.20 − $1,860.00 = $174.20
4.$5,500.00 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 $6,959.25; interest $1,459.25

  1. A = P(1 + r)n = $5,500.00 × (1 + 0.04)6
  2. = $5,500.00 × 1.265319
  3. ≈ $6,959.25
  4. Interest = $6,959.25 − $5,500.00 = $1,459.25
5.$7,500.00 is invested at 4.5% per year, compounded yearly, for 10 years. Find the final amount and the interest earned, to the nearest cent.

Answer: Amount $11,647.27; interest $4,147.27

  1. A = P(1 + r)n = $7,500.00 × (1 + 0.045)10
  2. = $7,500.00 × 1.552969
  3. ≈ $11,647.27
  4. Interest = $11,647.27 − $7,500.00 = $4,147.27
6.$7,750.00 is invested at 2.5% per year, compounded yearly, for 2 years. Find the final amount and the interest earned, to the nearest cent.

Answer: Amount $8,142.34; interest $392.34

  1. A = P(1 + r)n = $7,750.00 × (1 + 0.025)2
  2. = $7,750.00 × 1.050625
  3. ≈ $8,142.34
  4. Interest = $8,142.34 − $7,750.00 = $392.34
7.Compare $8,500.00 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: $34.69

  1. Simple: I = $8,500.00 × 0.02 × 5 = $850.00
  2. Compound: A = $8,500.00 × 1.025 ≈ $9,384.69, so interest ≈ $884.69
  3. Difference = $884.69 − $850.00 = $34.69
8.$2,000.00 is invested at 2% per year, compounded yearly, for 2 years. Find the final amount and the interest earned, to the nearest cent.

Answer: Amount $2,080.80; interest $80.80

  1. A = P(1 + r)n = $2,000.00 × (1 + 0.02)2
  2. = $2,000.00 × 1.0404
  3. ≈ $2,080.80
  4. Interest = $2,080.80 − $2,000.00 = $80.80
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