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11th Grade Simple and Compound Interest Worksheet — Level 3 — Practice Set 4 — 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 4 — Answers

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

1.Compare $13,750.00 invested for 3 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: $26.00

  1. Simple: I = $13,750.00 × 0.025 × 3 = $1,031.25
  2. Compound: A = $13,750.00 × 1.0253 ≈ $14,807.25, so interest ≈ $1,057.25
  3. Difference = $1,057.25 − $1,031.25 = $26.00
2.Compare $5,000.00 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: $569.24

  1. Simple: I = $5,000.00 × 0.06 × 8 = $2,400.00
  2. Compound: A = $5,000.00 × 1.068 ≈ $7,969.24, so interest ≈ $2,969.24
  3. Difference = $2,969.24 − $2,400.00 = $569.24
3.Compare $10,500.00 invested for 7 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: $143.70

  1. Simple: I = $10,500.00 × 0.025 × 7 = $1,837.50
  2. Compound: A = $10,500.00 × 1.0257 ≈ $12,481.20, so interest ≈ $1,981.20
  3. Difference = $1,981.20 − $1,837.50 = $143.70
4.Compare $14,500.00 invested for 10 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: $2,767.29

  1. Simple: I = $14,500.00 × 0.06 × 10 = $8,700.00
  2. Compound: A = $14,500.00 × 1.0610 ≈ $25,967.29, so interest ≈ $11,467.29
  3. Difference = $11,467.29 − $8,700.00 = $2,767.29
5.$5,250.00 is invested at 3% per year, compounded yearly, for 5 years. Find the final amount and the interest earned, to the nearest cent.

Answer: Amount $6,086.19; interest $836.19

  1. A = P(1 + r)n = $5,250.00 × (1 + 0.03)5
  2. = $5,250.00 × 1.159274
  3. ≈ $6,086.19
  4. Interest = $6,086.19 − $5,250.00 = $836.19
6.Compare $4,000.00 invested for 2 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: $1.60

  1. Simple: I = $4,000.00 × 0.02 × 2 = $160.00
  2. Compound: A = $4,000.00 × 1.022 ≈ $4,161.60, so interest ≈ $161.60
  3. Difference = $161.60 − $160.00 = $1.60
7.$4,250.00 is invested at 6% per year, compounded yearly, for 7 years. Find the final amount and the interest earned, to the nearest cent.

Answer: Amount $6,390.43; interest $2,140.43

  1. A = P(1 + r)n = $4,250.00 × (1 + 0.06)7
  2. = $4,250.00 × 1.50363
  3. ≈ $6,390.43
  4. Interest = $6,390.43 − $4,250.00 = $2,140.43
8.$9,500.00 is invested at 4% per year, compounded yearly, for 5 years. Find the final amount and the interest earned, to the nearest cent.

Answer: Amount $11,558.20; interest $2,058.20

  1. A = P(1 + r)n = $9,500.00 × (1 + 0.04)5
  2. = $9,500.00 × 1.216653
  3. ≈ $11,558.20
  4. Interest = $11,558.20 − $9,500.00 = $2,058.20
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