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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.Compare $12,750.00 invested for 9 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: $443.36

  1. Simple: I = $12,750.00 × 0.03 × 9 = $3,442.50
  2. Compound: A = $12,750.00 × 1.039 ≈ $16,635.86, so interest ≈ $3,885.86
  3. Difference = $3,885.86 − $3,442.50 = $443.36
2.Compare $9,750.00 invested for 4 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: $219.15

  1. Simple: I = $9,750.00 × 0.06 × 4 = $2,340.00
  2. Compound: A = $9,750.00 × 1.064 ≈ $12,309.15, so interest ≈ $2,559.15
  3. Difference = $2,559.15 − $2,340.00 = $219.15
3.$9,750.00 is invested at 6% per year, compounded yearly, for 5 years. Find the final amount and the interest earned, to the nearest cent.

Answer: Amount $13,047.70; interest $3,297.70

  1. A = P(1 + r)n = $9,750.00 × (1 + 0.06)5
  2. = $9,750.00 × 1.338226
  3. ≈ $13,047.70
  4. Interest = $13,047.70 − $9,750.00 = $3,297.70
4.$10,750.00 is invested at 4% per year, compounded yearly, for 10 years. Find the final amount and the interest earned, to the nearest cent.

Answer: Amount $15,912.63; interest $5,162.63

  1. A = P(1 + r)n = $10,750.00 × (1 + 0.04)10
  2. = $10,750.00 × 1.480244
  3. ≈ $15,912.63
  4. Interest = $15,912.63 − $10,750.00 = $5,162.63
5.Compare $14,250.00 invested for 8 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: $692.11

  1. Simple: I = $14,250.00 × 0.04 × 8 = $4,560.00
  2. Compound: A = $14,250.00 × 1.048 ≈ $19,502.11, so interest ≈ $5,252.11
  3. Difference = $5,252.11 − $4,560.00 = $692.11
6.$14,500.00 is invested at 2.5% per year, compounded yearly, for 7 years. Find the final amount and the interest earned, to the nearest cent.

Answer: Amount $17,235.94; interest $2,735.94

  1. A = P(1 + r)n = $14,500.00 × (1 + 0.025)7
  2. = $14,500.00 × 1.188686
  3. ≈ $17,235.94
  4. Interest = $17,235.94 − $14,500.00 = $2,735.94
7.$13,000.00 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 $19,101.26; interest $6,101.26

  1. A = P(1 + r)n = $13,000.00 × (1 + 0.08)5
  2. = $13,000.00 × 1.469328
  3. ≈ $19,101.26
  4. Interest = $19,101.26 − $13,000.00 = $6,101.26
8.Compare $5,750.00 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: $398.64

  1. Simple: I = $5,750.00 × 0.08 × 5 = $2,300.00
  2. Compound: A = $5,750.00 × 1.085 ≈ $8,448.64, so interest ≈ $2,698.64
  3. Difference = $2,698.64 − $2,300.00 = $398.64
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