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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 6 years. Find the final amount and the interest earned, to the nearest cent.

Answer: Amount $11,543.16; interest $1,293.16

  1. A = P(1 + r)n = $10,250.00 × (1 + 0.02)6
  2. = $10,250.00 × 1.126162
  3. ≈ $11,543.16
  4. Interest = $11,543.16 − $10,250.00 = $1,293.16
2.$8,750.00 is invested at 5% per year, compounded yearly, for 8 years. Find the final amount and the interest earned, to the nearest cent.

Answer: Amount $12,927.74; interest $4,177.74

  1. A = P(1 + r)n = $8,750.00 × (1 + 0.05)8
  2. = $8,750.00 × 1.477455
  3. ≈ $12,927.74
  4. Interest = $12,927.74 − $8,750.00 = $4,177.74
3.$13,750.00 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 $18,817.82; interest $5,067.82

  1. A = P(1 + r)n = $13,750.00 × (1 + 0.04)8
  2. = $13,750.00 × 1.368569
  3. ≈ $18,817.82
  4. Interest = $18,817.82 − $13,750.00 = $5,067.82
4.Compare $7,250.00 invested for 4 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: $39.94

  1. Simple: I = $7,250.00 × 0.03 × 4 = $870.00
  2. Compound: A = $7,250.00 × 1.034 ≈ $8,159.94, so interest ≈ $909.94
  3. Difference = $909.94 − $870.00 = $39.94
5.$10,250.00 is invested at 8% per year, compounded yearly, for 5 years. Find the final amount and the interest earned, to the nearest cent.

Answer: Amount $15,060.61; interest $4,810.61

  1. A = P(1 + r)n = $10,250.00 × (1 + 0.08)5
  2. = $10,250.00 × 1.469328
  3. ≈ $15,060.61
  4. Interest = $15,060.61 − $10,250.00 = $4,810.61
6.Compare $9,000.00 invested for 6 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: $55.46

  1. Simple: I = $9,000.00 × 0.02 × 6 = $1,080.00
  2. Compound: A = $9,000.00 × 1.026 ≈ $10,135.46, so interest ≈ $1,135.46
  3. Difference = $1,135.46 − $1,080.00 = $55.46
7.$4,250.00 is invested at 4.5% per year, compounded yearly, for 7 years. Find the final amount and the interest earned, to the nearest cent.

Answer: Amount $5,783.66; interest $1,533.66

  1. A = P(1 + r)n = $4,250.00 × (1 + 0.045)7
  2. = $4,250.00 × 1.360862
  3. ≈ $5,783.66
  4. Interest = $5,783.66 − $4,250.00 = $1,533.66
8.$8,500.00 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 $11,632.84; interest $3,132.84

  1. A = P(1 + r)n = $8,500.00 × (1 + 0.04)8
  2. = $8,500.00 × 1.368569
  3. ≈ $11,632.84
  4. Interest = $11,632.84 − $8,500.00 = $3,132.84
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