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

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

1.Compare $13,250.00 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: $460.74

  1. Simple: I = $13,250.00 × 0.03 × 9 = $3,577.50
  2. Compound: A = $13,250.00 × 1.039 ≈ $17,288.24, so interest ≈ $4,038.24
  3. Difference = $4,038.24 − $3,577.50 = $460.74
2.Compare $14,250.00 invested for 8 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: $166.15

  1. Simple: I = $14,250.00 × 0.02 × 8 = $2,280.00
  2. Compound: A = $14,250.00 × 1.028 ≈ $16,696.15, so interest ≈ $2,446.15
  3. Difference = $2,446.15 − $2,280.00 = $166.15
3.$9,500.00 is invested at 4.5% per year, compounded yearly, for 8 years. Find the final amount and the interest earned, to the nearest cent.

Answer: Amount $13,509.96; interest $4,009.96

  1. A = P(1 + r)n = $9,500.00 × (1 + 0.045)8
  2. = $9,500.00 × 1.422101
  3. ≈ $13,509.96
  4. Interest = $13,509.96 − $9,500.00 = $4,009.96
4.$13,750.00 is invested at 3% per year, compounded yearly, for 4 years. Find the final amount and the interest earned, to the nearest cent.

Answer: Amount $15,475.75; interest $1,725.75

  1. A = P(1 + r)n = $13,750.00 × (1 + 0.03)4
  2. = $13,750.00 × 1.125509
  3. ≈ $15,475.75
  4. Interest = $15,475.75 − $13,750.00 = $1,725.75
5.Compare $2,000.00 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: $9.73

  1. Simple: I = $2,000.00 × 0.04 × 3 = $240.00
  2. Compound: A = $2,000.00 × 1.043 ≈ $2,249.73, so interest ≈ $249.73
  3. Difference = $249.73 − $240.00 = $9.73
6.$7,000.00 is invested at 4% per year, compounded yearly, for 4 years. Find the final amount and the interest earned, to the nearest cent.

Answer: Amount $8,189.01; interest $1,189.01

  1. A = P(1 + r)n = $7,000.00 × (1 + 0.04)4
  2. = $7,000.00 × 1.169859
  3. ≈ $8,189.01
  4. Interest = $8,189.01 − $7,000.00 = $1,189.01
7.Compare $5,750.00 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: $279.27

  1. Simple: I = $5,750.00 × 0.04 × 8 = $1,840.00
  2. Compound: A = $5,750.00 × 1.048 ≈ $7,869.27, so interest ≈ $2,119.27
  3. Difference = $2,119.27 − $1,840.00 = $279.27
8.Compare $1,000.00 invested for 10 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: $43.92

  1. Simple: I = $1,000.00 × 0.03 × 10 = $300.00
  2. Compound: A = $1,000.00 × 1.0310 ≈ $1,343.92, so interest ≈ $343.92
  3. Difference = $343.92 − $300.00 = $43.92
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