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Year 10 Simple and Compound Interest Worksheet — Level 3 — Practice Set 2 — 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 2 — Answers

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

1.Compare $14,750.00 invested for 5 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: $60.19

  1. Simple: I = $14,750.00 × 0.02 × 5 = $1,475.00
  2. Compound: A = $14,750.00 × 1.025 ≈ $16,285.19, so interest ≈ $1,535.19
  3. Difference = $1,535.19 − $1,475.00 = $60.19
2.$11,250.00 is invested at 8% per year, compounded yearly, for 7 years. Find the final amount and the interest earned, to the nearest cent.

Answer: Amount $19,280.52; interest $8,030.52

  1. A = P(1 + r)n = $11,250.00 × (1 + 0.08)7
  2. = $11,250.00 × 1.713824
  3. ≈ $19,280.52
  4. Interest = $19,280.52 − $11,250.00 = $8,030.52
3.Compare $9,250.00 invested for 3 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: $17.49

  1. Simple: I = $9,250.00 × 0.025 × 3 = $693.75
  2. Compound: A = $9,250.00 × 1.0253 ≈ $9,961.24, so interest ≈ $711.24
  3. Difference = $711.24 − $693.75 = $17.49
4.$10,000.00 is invested at 2% per year, compounded yearly, for 8 years. Find the final amount and the interest earned, to the nearest cent.

Answer: Amount $11,716.59; interest $1,716.59

  1. A = P(1 + r)n = $10,000.00 × (1 + 0.02)8
  2. = $10,000.00 × 1.171659
  3. ≈ $11,716.59
  4. Interest = $11,716.59 − $10,000.00 = $1,716.59
5.Compare $6,750.00 invested for 6 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: $65.43

  1. Simple: I = $6,750.00 × 0.025 × 6 = $1,012.50
  2. Compound: A = $6,750.00 × 1.0256 ≈ $7,827.93, so interest ≈ $1,077.93
  3. Difference = $1,077.93 − $1,012.50 = $65.43
6.Compare $15,000.00 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: $210.78

  1. Simple: I = $15,000.00 × 0.03 × 6 = $2,700.00
  2. Compound: A = $15,000.00 × 1.036 ≈ $17,910.78, so interest ≈ $2,910.78
  3. Difference = $2,910.78 − $2,700.00 = $210.78
7.Compare $4,750.00 invested for 3 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: $29.29

  1. Simple: I = $4,750.00 × 0.045 × 3 = $641.25
  2. Compound: A = $4,750.00 × 1.0453 ≈ $5,420.54, so interest ≈ $670.54
  3. Difference = $670.54 − $641.25 = $29.29
8.Compare $6,500.00 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: $170.83

  1. Simple: I = $6,500.00 × 0.05 × 5 = $1,625.00
  2. Compound: A = $6,500.00 × 1.055 ≈ $8,295.83, so interest ≈ $1,795.83
  3. Difference = $1,795.83 − $1,625.00 = $170.83
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