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Year 11 Simple and Compound Interest Worksheet — Level 3 — Answers

Answer sheet with worked solutions for the Year 11 financial mathematics worksheet.

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Success TutoringWorksheetsAnswer sheetYear 11 · Mathematics · Financial Mathematics

Year 11 Simple and Compound Interest Worksheet — Level 3 — Answers

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

1.$10,250.00 is invested at 2% per year, compounded yearly, for 8 years. Find the final amount and the interest earned, to the nearest cent.

Answer: Amount $12,009.51; interest $1,759.51

  1. A = P(1 + r)n = $10,250.00 × (1 + 0.02)8
  2. = $10,250.00 × 1.171659
  3. ≈ $12,009.51
  4. Interest = $12,009.51 − $10,250.00 = $1,759.51
2.$8,000.00 is invested at 3% per year, compounded yearly, for 4 years. Find the final amount and the interest earned, to the nearest cent.

Answer: Amount $9,004.07; interest $1,004.07

  1. A = P(1 + r)n = $8,000.00 × (1 + 0.03)4
  2. = $8,000.00 × 1.125509
  3. ≈ $9,004.07
  4. Interest = $9,004.07 − $8,000.00 = $1,004.07
3.Compare $1,250.00 invested for 3 years at 3% per year as simple interest and as interest compounded yearly. How much more does compound interest earn, to the nearest cent?

Answer: $3.41

  1. Simple: I = $1,250.00 × 0.03 × 3 = $112.50
  2. Compound: A = $1,250.00 × 1.033 ≈ $1,365.91, so interest ≈ $115.91
  3. Difference = $115.91 − $112.50 = $3.41
4.$6,000.00 is invested at 8% per year, compounded yearly, for 9 years. Find the final amount and the interest earned, to the nearest cent.

Answer: Amount $11,994.03; interest $5,994.03

  1. A = P(1 + r)n = $6,000.00 × (1 + 0.08)9
  2. = $6,000.00 × 1.999005
  3. ≈ $11,994.03
  4. Interest = $11,994.03 − $6,000.00 = $5,994.03
5.Compare $2,000.00 invested for 7 years at 5% per year as simple interest and as interest compounded yearly. How much more does compound interest earn, to the nearest cent?

Answer: $114.20

  1. Simple: I = $2,000.00 × 0.05 × 7 = $700.00
  2. Compound: A = $2,000.00 × 1.057 ≈ $2,814.20, so interest ≈ $814.20
  3. Difference = $814.20 − $700.00 = $114.20
6.Compare $9,000.00 invested for 6 years at 8% per year as simple interest and as interest compounded yearly. How much more does compound interest earn, to the nearest cent?

Answer: $961.87

  1. Simple: I = $9,000.00 × 0.08 × 6 = $4,320.00
  2. Compound: A = $9,000.00 × 1.086 ≈ $14,281.87, so interest ≈ $5,281.87
  3. Difference = $5,281.87 − $4,320.00 = $961.87
7.$8,750.00 is invested at 4% per year, compounded yearly, for 4 years. Find the final amount and the interest earned, to the nearest cent.

Answer: Amount $10,236.26; interest $1,486.26

  1. A = P(1 + r)n = $8,750.00 × (1 + 0.04)4
  2. = $8,750.00 × 1.169859
  3. ≈ $10,236.26
  4. Interest = $10,236.26 − $8,750.00 = $1,486.26
8.Compare $3,250.00 invested for 9 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: $49.05

  1. Simple: I = $3,250.00 × 0.02 × 9 = $585.00
  2. Compound: A = $3,250.00 × 1.029 ≈ $3,884.05, so interest ≈ $634.05
  3. Difference = $634.05 − $585.00 = $49.05
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