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Year 10 Simple and Compound Interest Worksheet — Level 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 — Answers

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

1.Compare $13,500.00 invested for 2 years at 4% per year as simple interest and as interest compounded yearly. How much more does compound interest earn, to the nearest cent?

Answer: $21.60

  1. Simple: I = $13,500.00 × 0.04 × 2 = $1,080.00
  2. Compound: A = $13,500.00 × 1.042 ≈ $14,601.60, so interest ≈ $1,101.60
  3. Difference = $1,101.60 − $1,080.00 = $21.60
2.Compare $12,500.00 invested for 9 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: $3,487.56

  1. Simple: I = $12,500.00 × 0.08 × 9 = $9,000.00
  2. Compound: A = $12,500.00 × 1.089 ≈ $24,987.56, so interest ≈ $12,487.56
  3. Difference = $12,487.56 − $9,000.00 = $3,487.56
3.$3,750.00 is invested at 8% per year, compounded yearly, for 8 years. Find the final amount and the interest earned, to the nearest cent.

Answer: Amount $6,940.99; interest $3,190.99

  1. A = P(1 + r)n = $3,750.00 × (1 + 0.08)8
  2. = $3,750.00 × 1.85093
  3. ≈ $6,940.99
  4. Interest = $6,940.99 − $3,750.00 = $3,190.99
4.Compare $13,000.00 invested for 2 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: $8.12

  1. Simple: I = $13,000.00 × 0.025 × 2 = $650.00
  2. Compound: A = $13,000.00 × 1.0252 ≈ $13,658.12, so interest ≈ $658.12
  3. Difference = $658.12 − $650.00 = $8.12
5.$9,500.00 is invested at 4% per year, compounded yearly, for 3 years. Find the final amount and the interest earned, to the nearest cent.

Answer: Amount $10,686.21; interest $1,186.21

  1. A = P(1 + r)n = $9,500.00 × (1 + 0.04)3
  2. = $9,500.00 × 1.124864
  3. ≈ $10,686.21
  4. Interest = $10,686.21 − $9,500.00 = $1,186.21
6.$10,500.00 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 $16,306.18; interest $5,806.18

  1. A = P(1 + r)n = $10,500.00 × (1 + 0.045)10
  2. = $10,500.00 × 1.552969
  3. ≈ $16,306.18
  4. Interest = $16,306.18 − $10,500.00 = $5,806.18
7.$13,250.00 is invested at 2.5% per year, compounded yearly, for 10 years. Find the final amount and the interest earned, to the nearest cent.

Answer: Amount $16,961.12; interest $3,711.12

  1. A = P(1 + r)n = $13,250.00 × (1 + 0.025)10
  2. = $13,250.00 × 1.280085
  3. ≈ $16,961.12
  4. Interest = $16,961.12 − $13,250.00 = $3,711.12
8.Compare $1,500.00 invested for 5 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: $31.77

  1. Simple: I = $1,500.00 × 0.045 × 5 = $337.50
  2. Compound: A = $1,500.00 × 1.0455 ≈ $1,869.27, so interest ≈ $369.27
  3. Difference = $369.27 − $337.50 = $31.77
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