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

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

1.$2,250.00 is invested at 2.5% per year, compounded yearly, for 3 years. Find the final amount and the interest earned, to the nearest cent.

Answer: Amount $2,423.00; interest $173.00

  1. A = P(1 + r)n = $2,250.00 × (1 + 0.025)3
  2. = $2,250.00 × 1.076891
  3. ≈ $2,423.00
  4. Interest = $2,423.00 − $2,250.00 = $173.00
2.$2,750.00 is invested at 6% per year, compounded yearly, for 9 years. Find the final amount and the interest earned, to the nearest cent.

Answer: Amount $4,646.07; interest $1,896.07

  1. A = P(1 + r)n = $2,750.00 × (1 + 0.06)9
  2. = $2,750.00 × 1.689479
  3. ≈ $4,646.07
  4. Interest = $4,646.07 − $2,750.00 = $1,896.07
3.$6,500.00 is invested at 2% per year, compounded yearly, for 7 years. Find the final amount and the interest earned, to the nearest cent.

Answer: Amount $7,466.46; interest $966.46

  1. A = P(1 + r)n = $6,500.00 × (1 + 0.02)7
  2. = $6,500.00 × 1.148686
  3. ≈ $7,466.46
  4. Interest = $7,466.46 − $6,500.00 = $966.46
4.$7,500.00 is invested at 6% per year, compounded yearly, for 3 years. Find the final amount and the interest earned, to the nearest cent.

Answer: Amount $8,932.62; interest $1,432.62

  1. A = P(1 + r)n = $7,500.00 × (1 + 0.06)3
  2. = $7,500.00 × 1.191016
  3. ≈ $8,932.62
  4. Interest = $8,932.62 − $7,500.00 = $1,432.62
5.$14,000.00 is invested at 4% per year, compounded yearly, for 2 years. Find the final amount and the interest earned, to the nearest cent.

Answer: Amount $15,142.40; interest $1,142.40

  1. A = P(1 + r)n = $14,000.00 × (1 + 0.04)2
  2. = $14,000.00 × 1.0816
  3. ≈ $15,142.40
  4. Interest = $15,142.40 − $14,000.00 = $1,142.40
6.$4,500.00 is invested at 4.5% per year, compounded yearly, for 2 years. Find the final amount and the interest earned, to the nearest cent.

Answer: Amount $4,914.11; interest $414.11

  1. A = P(1 + r)n = $4,500.00 × (1 + 0.045)2
  2. = $4,500.00 × 1.092025
  3. ≈ $4,914.11
  4. Interest = $4,914.11 − $4,500.00 = $414.11
7.Compare $10,500.00 invested for 7 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: $208.68

  1. Simple: I = $10,500.00 × 0.03 × 7 = $2,205.00
  2. Compound: A = $10,500.00 × 1.037 ≈ $12,913.68, so interest ≈ $2,413.68
  3. Difference = $2,413.68 − $2,205.00 = $208.68
8.Compare $12,500.00 invested for 3 years at 2.5% per year as simple interest and as interest compounded yearly. How much more does compound interest earn, to the nearest cent?

Answer: $23.63

  1. Simple: I = $12,500.00 × 0.025 × 3 = $937.50
  2. Compound: A = $12,500.00 × 1.0253 ≈ $13,461.13, so interest ≈ $961.13
  3. Difference = $961.13 − $937.50 = $23.63
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