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Year 11 Simple and Compound Interest Worksheet — Level 3 — Practice Set 4 — 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 4 — Answers

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

1.$13,750.00 is invested at 4% per year, compounded yearly, for 4 years. Find the final amount and the interest earned, to the nearest cent.

Answer: Amount $16,085.56; interest $2,335.56

  1. A = P(1 + r)n = $13,750.00 × (1 + 0.04)4
  2. = $13,750.00 × 1.169859
  3. ≈ $16,085.56
  4. Interest = $16,085.56 − $13,750.00 = $2,335.56
2.$10,000.00 is invested at 3% per year, compounded yearly, for 8 years. Find the final amount and the interest earned, to the nearest cent.

Answer: Amount $12,667.70; interest $2,667.70

  1. A = P(1 + r)n = $10,000.00 × (1 + 0.03)8
  2. = $10,000.00 × 1.26677
  3. ≈ $12,667.70
  4. Interest = $12,667.70 − $10,000.00 = $2,667.70
3.Compare $3,250.00 invested for 6 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: $45.67

  1. Simple: I = $3,250.00 × 0.03 × 6 = $585.00
  2. Compound: A = $3,250.00 × 1.036 ≈ $3,880.67, so interest ≈ $630.67
  3. Difference = $630.67 − $585.00 = $45.67
4.Compare $2,750.00 invested for 5 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: $190.65

  1. Simple: I = $2,750.00 × 0.08 × 5 = $1,100.00
  2. Compound: A = $2,750.00 × 1.085 ≈ $4,040.65, so interest ≈ $1,290.65
  3. Difference = $1,290.65 − $1,100.00 = $190.65
5.$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
6.Compare $11,500.00 invested for 10 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: $4,127.64

  1. Simple: I = $11,500.00 × 0.08 × 10 = $9,200.00
  2. Compound: A = $11,500.00 × 1.0810 ≈ $24,827.64, so interest ≈ $13,327.64
  3. Difference = $13,327.64 − $9,200.00 = $4,127.64
7.$13,750.00 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 $16,713.21; interest $2,963.21

  1. A = P(1 + r)n = $13,750.00 × (1 + 0.05)4
  2. = $13,750.00 × 1.215506
  3. ≈ $16,713.21
  4. Interest = $16,713.21 − $13,750.00 = $2,963.21
8.Compare $6,000.00 invested for 9 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: $896.87

  1. Simple: I = $6,000.00 × 0.06 × 9 = $3,240.00
  2. Compound: A = $6,000.00 × 1.069 ≈ $10,136.87, so interest ≈ $4,136.87
  3. Difference = $4,136.87 − $3,240.00 = $896.87
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