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

Answer sheet with worked solutions for the 10th Grade financial math worksheet.

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

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

1.$9,250.00 is invested at 6% per year, compounded yearly, for 8 years. Find the final amount and the interest earned, to the nearest cent.

Answer: Amount $14,743.09; interest $5,493.09

  1. A = P(1 + r)n = $9,250.00 × (1 + 0.06)8
  2. = $9,250.00 × 1.593848
  3. ≈ $14,743.09
  4. Interest = $14,743.09 − $9,250.00 = $5,493.09
2.Compare $11,500.00 invested for 7 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: $961.75

  1. Simple: I = $11,500.00 × 0.06 × 7 = $4,830.00
  2. Compound: A = $11,500.00 × 1.067 ≈ $17,291.75, so interest ≈ $5,791.75
  3. Difference = $5,791.75 − $4,830.00 = $961.75
3.Compare $13,500.00 invested for 2 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: $21.60

  1. Simple: I = $13,500.00 × 0.04 × 2 = $1,080.00
  2. Compound: A = $13,500.00 × 1.042 ≈ $14,601.60, so interest ≈ $1,101.60
  3. Difference = $1,101.60 − $1,080.00 = $21.60
4.$5,250.00 is invested at 3% per year, compounded yearly, for 7 years. Find the final amount and the interest earned, to the nearest cent.

Answer: Amount $6,456.84; interest $1,206.84

  1. A = P(1 + r)n = $5,250.00 × (1 + 0.03)7
  2. = $5,250.00 × 1.229874
  3. ≈ $6,456.84
  4. Interest = $6,456.84 − $5,250.00 = $1,206.84
5.Compare $2,250.00 invested for 4 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: $28.17

  1. Simple: I = $2,250.00 × 0.045 × 4 = $405.00
  2. Compound: A = $2,250.00 × 1.0454 ≈ $2,683.17, so interest ≈ $433.17
  3. Difference = $433.17 − $405.00 = $28.17
6.Compare $11,250.00 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: $295.67

  1. Simple: I = $11,250.00 × 0.05 × 5 = $2,812.50
  2. Compound: A = $11,250.00 × 1.055 ≈ $14,358.17, so interest ≈ $3,108.17
  3. Difference = $3,108.17 − $2,812.50 = $295.67
7.Compare $11,750.00 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: $570.69

  1. Simple: I = $11,750.00 × 0.04 × 8 = $3,760.00
  2. Compound: A = $11,750.00 × 1.048 ≈ $16,080.69, so interest ≈ $4,330.69
  3. Difference = $4,330.69 − $3,760.00 = $570.69
8.Compare $12,500.00 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: $77.08

  1. Simple: I = $12,500.00 × 0.045 × 3 = $1,687.50
  2. Compound: A = $12,500.00 × 1.0453 ≈ $14,264.58, so interest ≈ $1,764.58
  3. Difference = $1,764.58 − $1,687.50 = $77.08
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