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11th Grade Simple and Compound Interest Worksheet — Level 3 — Practice Set 2 — Answers

Answer sheet with worked solutions for the 11th Grade financial math worksheet.

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11th 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.$10,500.00 is invested at 4.5% per year, compounded yearly, for 4 years. Find the final amount and the interest earned, to the nearest cent.

Answer: Amount $12,521.45; interest $2,021.45

  1. A = P(1 + r)n = $10,500.00 × (1 + 0.045)4
  2. = $10,500.00 × 1.192519
  3. ≈ $12,521.45
  4. Interest = $12,521.45 − $10,500.00 = $2,021.45
2.Compare $1,500.00 invested for 3 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: $11.44

  1. Simple: I = $1,500.00 × 0.05 × 3 = $225.00
  2. Compound: A = $1,500.00 × 1.053 ≈ $1,736.44, so interest ≈ $236.44
  3. Difference = $236.44 − $225.00 = $11.44
3.Compare $3,500.00 invested for 10 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: $105.30

  1. Simple: I = $3,500.00 × 0.025 × 10 = $875.00
  2. Compound: A = $3,500.00 × 1.02510 ≈ $4,480.30, so interest ≈ $980.30
  3. Difference = $980.30 − $875.00 = $105.30
4.Compare $8,250.00 invested for 2 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: $52.80

  1. Simple: I = $8,250.00 × 0.08 × 2 = $1,320.00
  2. Compound: A = $8,250.00 × 1.082 ≈ $9,622.80, so interest ≈ $1,372.80
  3. Difference = $1,372.80 − $1,320.00 = $52.80
5.$9,750.00 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 $12,351.01; interest $2,601.01

  1. A = P(1 + r)n = $9,750.00 × (1 + 0.03)8
  2. = $9,750.00 × 1.26677
  3. ≈ $12,351.01
  4. Interest = $12,351.01 − $9,750.00 = $2,601.01
6.Compare $4,250.00 invested for 6 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: $59.72

  1. Simple: I = $4,250.00 × 0.03 × 6 = $765.00
  2. Compound: A = $4,250.00 × 1.036 ≈ $5,074.72, so interest ≈ $824.72
  3. Difference = $824.72 − $765.00 = $59.72
7.Compare $15,000.00 invested for 9 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: $1,519.92

  1. Simple: I = $15,000.00 × 0.05 × 9 = $6,750.00
  2. Compound: A = $15,000.00 × 1.059 ≈ $23,269.92, so interest ≈ $8,269.92
  3. Difference = $8,269.92 − $6,750.00 = $1,519.92
8.$9,500.00 is invested at 4.5% per year, compounded yearly, for 3 years. Find the final amount and the interest earned, to the nearest cent.

Answer: Amount $10,841.08; interest $1,341.08

  1. A = P(1 + r)n = $9,500.00 × (1 + 0.045)3
  2. = $9,500.00 × 1.141166
  3. ≈ $10,841.08
  4. Interest = $10,841.08 − $9,500.00 = $1,341.08
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