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

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

1.Compare $6,750.00 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: $8.15

  1. Simple: I = $6,750.00 × 0.02 × 3 = $405.00
  2. Compound: A = $6,750.00 × 1.023 ≈ $7,163.15, so interest ≈ $413.15
  3. Difference = $413.15 − $405.00 = $8.15
2.$12,750.00 is invested at 2% per year, compounded yearly, for 5 years. Find the final amount and the interest earned, to the nearest cent.

Answer: Amount $14,077.03; interest $1,327.03

  1. A = P(1 + r)n = $12,750.00 × (1 + 0.02)5
  2. = $12,750.00 × 1.104081
  3. ≈ $14,077.03
  4. Interest = $14,077.03 − $12,750.00 = $1,327.03
3.Compare $6,500.00 invested for 3 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: $31.62

  1. Simple: I = $6,500.00 × 0.04 × 3 = $780.00
  2. Compound: A = $6,500.00 × 1.043 ≈ $7,311.62, so interest ≈ $811.62
  3. Difference = $811.62 − $780.00 = $31.62
4.$4,500.00 is invested at 8% per year, compounded yearly, for 9 years. Find the final amount and the interest earned, to the nearest cent.

Answer: Amount $8,995.52; interest $4,495.52

  1. A = P(1 + r)n = $4,500.00 × (1 + 0.08)9
  2. = $4,500.00 × 1.999005
  3. ≈ $8,995.52
  4. Interest = $8,995.52 − $4,500.00 = $4,495.52
5.Compare $3,000.00 invested for 6 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: $320.62

  1. Simple: I = $3,000.00 × 0.08 × 6 = $1,440.00
  2. Compound: A = $3,000.00 × 1.086 ≈ $4,760.62, so interest ≈ $1,760.62
  3. Difference = $1,760.62 − $1,440.00 = $320.62
6.Compare $14,750.00 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: $207.27

  1. Simple: I = $14,750.00 × 0.03 × 6 = $2,655.00
  2. Compound: A = $14,750.00 × 1.036 ≈ $17,612.27, so interest ≈ $2,862.27
  3. Difference = $2,862.27 − $2,655.00 = $207.27
7.$13,250.00 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 $22,385.60; interest $9,135.60

  1. A = P(1 + r)n = $13,250.00 × (1 + 0.06)9
  2. = $13,250.00 × 1.689479
  3. ≈ $22,385.60
  4. Interest = $22,385.60 − $13,250.00 = $9,135.60
8.$5,750.00 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 $7,824.96; interest $2,074.96

  1. A = P(1 + r)n = $5,750.00 × (1 + 0.045)7
  2. = $5,750.00 × 1.360862
  3. ≈ $7,824.96
  4. Interest = $7,824.96 − $5,750.00 = $2,074.96
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