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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.$5,000.00 is invested at 8% per year, compounded yearly, for 4 years. Find the final amount and the interest earned, to the nearest cent.

Answer: Amount $6,802.44; interest $1,802.44

  1. A = P(1 + r)n = $5,000.00 × (1 + 0.08)4
  2. = $5,000.00 × 1.360489
  3. ≈ $6,802.44
  4. Interest = $6,802.44 − $5,000.00 = $1,802.44
2.$5,000.00 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 $5,955.08; interest $955.08

  1. A = P(1 + r)n = $5,000.00 × (1 + 0.06)3
  2. = $5,000.00 × 1.191016
  3. ≈ $5,955.08
  4. Interest = $5,955.08 − $5,000.00 = $955.08
3.$7,000.00 is invested at 4% per year, compounded yearly, for 8 years. Find the final amount and the interest earned, to the nearest cent.

Answer: Amount $9,579.98; interest $2,579.98

  1. A = P(1 + r)n = $7,000.00 × (1 + 0.04)8
  2. = $7,000.00 × 1.368569
  3. ≈ $9,579.98
  4. Interest = $9,579.98 − $7,000.00 = $2,579.98
4.Compare $3,000.00 invested for 7 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: $461.47

  1. Simple: I = $3,000.00 × 0.08 × 7 = $1,680.00
  2. Compound: A = $3,000.00 × 1.087 ≈ $5,141.47, so interest ≈ $2,141.47
  3. Difference = $2,141.47 − $1,680.00 = $461.47
5.Compare $10,500.00 invested for 7 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: $143.70

  1. Simple: I = $10,500.00 × 0.025 × 7 = $1,837.50
  2. Compound: A = $10,500.00 × 1.0257 ≈ $12,481.20, so interest ≈ $1,981.20
  3. Difference = $1,981.20 − $1,837.50 = $143.70
6.Compare $8,750.00 invested for 10 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: $702.14

  1. Simple: I = $8,750.00 × 0.04 × 10 = $3,500.00
  2. Compound: A = $8,750.00 × 1.0410 ≈ $12,952.14, so interest ≈ $4,202.14
  3. Difference = $4,202.14 − $3,500.00 = $702.14
7.Compare $12,750.00 invested for 4 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: $159.61

  1. Simple: I = $12,750.00 × 0.045 × 4 = $2,295.00
  2. Compound: A = $12,750.00 × 1.0454 ≈ $15,204.61, so interest ≈ $2,454.61
  3. Difference = $2,454.61 − $2,295.00 = $159.61
8.Compare $4,000.00 invested for 5 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: $105.13

  1. Simple: I = $4,000.00 × 0.05 × 5 = $1,000.00
  2. Compound: A = $4,000.00 × 1.055 ≈ $5,105.13, so interest ≈ $1,105.13
  3. Difference = $1,105.13 − $1,000.00 = $105.13
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