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10th Grade Simple and Compound Interest Worksheet — Level 3 — Practice Set 4 — 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 4 — Answers

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

1.Compare $10,250.00 invested for 10 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: $194.69

  1. Simple: I = $10,250.00 × 0.02 × 10 = $2,050.00
  2. Compound: A = $10,250.00 × 1.0210 ≈ $12,494.69, so interest ≈ $2,244.69
  3. Difference = $2,244.69 − $2,050.00 = $194.69
2.$15,000.00 is invested at 2.5% per year, compounded yearly, for 5 years. Find the final amount and the interest earned, to the nearest cent.

Answer: Amount $16,971.12; interest $1,971.12

  1. A = P(1 + r)n = $15,000.00 × (1 + 0.025)5
  2. = $15,000.00 × 1.131408
  3. ≈ $16,971.12
  4. Interest = $16,971.12 − $15,000.00 = $1,971.12
3.Compare $14,000.00 invested for 2 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: $35.00

  1. Simple: I = $14,000.00 × 0.05 × 2 = $1,400.00
  2. Compound: A = $14,000.00 × 1.052 ≈ $15,435.00, so interest ≈ $1,435.00
  3. Difference = $1,435.00 − $1,400.00 = $35.00
4.Compare $3,500.00 invested for 4 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: $141.71

  1. Simple: I = $3,500.00 × 0.08 × 4 = $1,120.00
  2. Compound: A = $3,500.00 × 1.084 ≈ $4,761.71, so interest ≈ $1,261.71
  3. Difference = $1,261.71 − $1,120.00 = $141.71
5.Compare $3,750.00 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: $130.40

  1. Simple: I = $3,750.00 × 0.03 × 9 = $1,012.50
  2. Compound: A = $3,750.00 × 1.039 ≈ $4,892.90, so interest ≈ $1,142.90
  3. Difference = $1,142.90 − $1,012.50 = $130.40
6.Compare $4,750.00 invested for 8 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: $540.78

  1. Simple: I = $4,750.00 × 0.06 × 8 = $2,280.00
  2. Compound: A = $4,750.00 × 1.068 ≈ $7,570.78, so interest ≈ $2,820.78
  3. Difference = $2,820.78 − $2,280.00 = $540.78
7.$1,500.00 is invested at 2.5% per year, compounded yearly, for 4 years. Find the final amount and the interest earned, to the nearest cent.

Answer: Amount $1,655.72; interest $155.72

  1. A = P(1 + r)n = $1,500.00 × (1 + 0.025)4
  2. = $1,500.00 × 1.103813
  3. ≈ $1,655.72
  4. Interest = $1,655.72 − $1,500.00 = $155.72
8.$9,750.00 is invested at 2.5% per year, compounded yearly, for 6 years. Find the final amount and the interest earned, to the nearest cent.

Answer: Amount $11,307.01; interest $1,557.01

  1. A = P(1 + r)n = $9,750.00 × (1 + 0.025)6
  2. = $9,750.00 × 1.159693
  3. ≈ $11,307.01
  4. Interest = $11,307.01 − $9,750.00 = $1,557.01
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