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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.$3,000.00 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 $3,800.31; interest $800.31

  1. A = P(1 + r)n = $3,000.00 × (1 + 0.03)8
  2. = $3,000.00 × 1.26677
  3. ≈ $3,800.31
  4. Interest = $3,800.31 − $3,000.00 = $800.31
2.Compare $15,000.00 invested for 2 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: $30.37

  1. Simple: I = $15,000.00 × 0.045 × 2 = $1,350.00
  2. Compound: A = $15,000.00 × 1.0452 ≈ $16,380.37, so interest ≈ $1,380.37
  3. Difference = $1,380.37 − $1,350.00 = $30.37
3.$7,000.00 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 $11,826.35; interest $4,826.35

  1. A = P(1 + r)n = $7,000.00 × (1 + 0.06)9
  2. = $7,000.00 × 1.689479
  3. ≈ $11,826.35
  4. Interest = $11,826.35 − $7,000.00 = $4,826.35
4.$7,250.00 is invested at 4% per year, compounded yearly, for 7 years. Find the final amount and the interest earned, to the nearest cent.

Answer: Amount $9,540.51; interest $2,290.51

  1. A = P(1 + r)n = $7,250.00 × (1 + 0.04)7
  2. = $7,250.00 × 1.315932
  3. ≈ $9,540.51
  4. Interest = $9,540.51 − $7,250.00 = $2,290.51
5.Compare $9,000.00 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: $236.53

  1. Simple: I = $9,000.00 × 0.05 × 5 = $2,250.00
  2. Compound: A = $9,000.00 × 1.055 ≈ $11,486.53, so interest ≈ $2,486.53
  3. Difference = $2,486.53 − $2,250.00 = $236.53
6.$3,750.00 is invested at 5% per year, compounded yearly, for 7 years. Find the final amount and the interest earned, to the nearest cent.

Answer: Amount $5,276.63; interest $1,526.63

  1. A = P(1 + r)n = $3,750.00 × (1 + 0.05)7
  2. = $3,750.00 × 1.4071
  3. ≈ $5,276.63
  4. Interest = $5,276.63 − $3,750.00 = $1,526.63
7.Compare $2,250.00 invested for 5 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: $14.42

  1. Simple: I = $2,250.00 × 0.025 × 5 = $281.25
  2. Compound: A = $2,250.00 × 1.0255 ≈ $2,545.67, so interest ≈ $295.67
  3. Difference = $295.67 − $281.25 = $14.42
8.$8,000.00 is invested at 4.5% per year, compounded yearly, for 2 years. Find the final amount and the interest earned, to the nearest cent.

Answer: Amount $8,736.20; interest $736.20

  1. A = P(1 + r)n = $8,000.00 × (1 + 0.045)2
  2. = $8,000.00 × 1.092025
  3. ≈ $8,736.20
  4. Interest = $8,736.20 − $8,000.00 = $736.20
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