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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.$5,500.00 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 $6,550.59; interest $1,050.59

  1. A = P(1 + r)n = $5,500.00 × (1 + 0.06)3
  2. = $5,500.00 × 1.191016
  3. ≈ $6,550.59
  4. Interest = $6,550.59 − $5,500.00 = $1,050.59
2.Compare $12,750.00 invested for 10 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: $2,433.31

  1. Simple: I = $12,750.00 × 0.06 × 10 = $7,650.00
  2. Compound: A = $12,750.00 × 1.0610 ≈ $22,833.31, so interest ≈ $10,083.31
  3. Difference = $10,083.31 − $7,650.00 = $2,433.31
3.Compare $7,500.00 invested for 7 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: $627.23

  1. Simple: I = $7,500.00 × 0.06 × 7 = $3,150.00
  2. Compound: A = $7,500.00 × 1.067 ≈ $11,277.23, so interest ≈ $3,777.23
  3. Difference = $3,777.23 − $3,150.00 = $627.23
4.$13,750.00 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 $23,230.34; interest $9,480.34

  1. A = P(1 + r)n = $13,750.00 × (1 + 0.06)9
  2. = $13,750.00 × 1.689479
  3. ≈ $23,230.34
  4. Interest = $23,230.34 − $13,750.00 = $9,480.34
5.Compare $3,250.00 invested for 3 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: $3.93

  1. Simple: I = $3,250.00 × 0.02 × 3 = $195.00
  2. Compound: A = $3,250.00 × 1.023 ≈ $3,448.93, so interest ≈ $198.93
  3. Difference = $198.93 − $195.00 = $3.93
6.Compare $8,750.00 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: $14.00

  1. Simple: I = $8,750.00 × 0.04 × 2 = $700.00
  2. Compound: A = $8,750.00 × 1.042 ≈ $9,464.00, so interest ≈ $714.00
  3. Difference = $714.00 − $700.00 = $14.00
7.$12,000.00 is invested at 5% per year, compounded yearly, for 10 years. Find the final amount and the interest earned, to the nearest cent.

Answer: Amount $19,546.74; interest $7,546.74

  1. A = P(1 + r)n = $12,000.00 × (1 + 0.05)10
  2. = $12,000.00 × 1.628895
  3. ≈ $19,546.74
  4. Interest = $19,546.74 − $12,000.00 = $7,546.74
8.$14,750.00 is invested at 4.5% per year, compounded yearly, for 3 years. Find the final amount and the interest earned, to the nearest cent.

Answer: Amount $16,832.20; interest $2,082.20

  1. A = P(1 + r)n = $14,750.00 × (1 + 0.045)3
  2. = $14,750.00 × 1.141166
  3. ≈ $16,832.20
  4. Interest = $16,832.20 − $14,750.00 = $2,082.20
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