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Year 11 Simple and Compound Interest Worksheet — Level 3 — Practice Set 2 — 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 2 — Answers

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

1.$10,500.00 is invested at 5% per year, compounded yearly, for 9 years. Find the final amount and the interest earned, to the nearest cent.

Answer: Amount $16,288.95; interest $5,788.95

  1. A = P(1 + r)n = $10,500.00 × (1 + 0.05)9
  2. = $10,500.00 × 1.551328
  3. ≈ $16,288.95
  4. Interest = $16,288.95 − $10,500.00 = $5,788.95
2.$5,500.00 is invested at 5% per year, compounded yearly, for 4 years. Find the final amount and the interest earned, to the nearest cent.

Answer: Amount $6,685.28; interest $1,185.28

  1. A = P(1 + r)n = $5,500.00 × (1 + 0.05)4
  2. = $5,500.00 × 1.215506
  3. ≈ $6,685.28
  4. Interest = $6,685.28 − $5,500.00 = $1,185.28
3.Compare $10,750.00 invested for 7 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: $93.37

  1. Simple: I = $10,750.00 × 0.02 × 7 = $1,505.00
  2. Compound: A = $10,750.00 × 1.027 ≈ $12,348.37, so interest ≈ $1,598.37
  3. Difference = $1,598.37 − $1,505.00 = $93.37
4.$14,750.00 is invested at 4.5% per year, compounded yearly, for 8 years. Find the final amount and the interest earned, to the nearest cent.

Answer: Amount $20,975.98; interest $6,225.98

  1. A = P(1 + r)n = $14,750.00 × (1 + 0.045)8
  2. = $14,750.00 × 1.422101
  3. ≈ $20,975.98
  4. Interest = $20,975.98 − $14,750.00 = $6,225.98
5.$12,750.00 is invested at 3% per year, compounded yearly, for 3 years. Find the final amount and the interest earned, to the nearest cent.

Answer: Amount $13,932.27; interest $1,182.27

  1. A = P(1 + r)n = $12,750.00 × (1 + 0.03)3
  2. = $12,750.00 × 1.092727
  3. ≈ $13,932.27
  4. Interest = $13,932.27 − $12,750.00 = $1,182.27
6.$7,000.00 is invested at 5% per year, compounded yearly, for 9 years. Find the final amount and the interest earned, to the nearest cent.

Answer: Amount $10,859.30; interest $3,859.30

  1. A = P(1 + r)n = $7,000.00 × (1 + 0.05)9
  2. = $7,000.00 × 1.551328
  3. ≈ $10,859.30
  4. Interest = $10,859.30 − $7,000.00 = $3,859.30
7.$11,250.00 is invested at 6% per year, compounded yearly, for 6 years. Find the final amount and the interest earned, to the nearest cent.

Answer: Amount $15,958.34; interest $4,708.34

  1. A = P(1 + r)n = $11,250.00 × (1 + 0.06)6
  2. = $11,250.00 × 1.418519
  3. ≈ $15,958.34
  4. Interest = $15,958.34 − $11,250.00 = $4,708.34
8.Compare $10,250.00 invested for 2 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: $4.10

  1. Simple: I = $10,250.00 × 0.02 × 2 = $410.00
  2. Compound: A = $10,250.00 × 1.022 ≈ $10,664.10, so interest ≈ $414.10
  3. Difference = $414.10 − $410.00 = $4.10
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