Year 10 Maths — Compound interest
Work out compound interest and the amount it grows to, and use the same idea for growth and depreciation.
Name: ________________________
1.£4000 is lent at 10 per cent per year, compounded half-yearly, for 1 year. What amount is owed at the end? Give just the number.
2.Sort each description by which kind of interest it belongs to.
Groups: Simple interest · Compound interest
- Each year's interest is added on before the next year is worked out
- A population rising by the same percentage every year
- The interest is the same amount every year
- Doubling the time doubles the interest exactly
- Interest is always worked out on the original sum only
- The amount grows faster and faster as the years go by
3.Find the compound interest on £1000 at 20 per cent per year for 2 years. Give just the number.
4.The simple interest on £4000 at 10 per cent for 2 years is £800. What is the compound interest on the same sum at the same rate and time? Give just the number.
5.A town of 10000 people grows by 10 per cent every year. How many people live there after 2 years?
6.Find the compound interest on £5000 at 10 per cent per year for 2 years. Give just the number.
7.A machine worth £20000 loses 10 per cent of its value every year. What is it worth after 2 years? Give just the number.
8.£2000 is invested at 10 per cent per year, compounded yearly, for 3 years. What amount does it grow to? Give just the number.
Answer key — Year 10 Maths — Compound interest
- 1. 4410
- 2. The interest is the same amount every year → Simple interest; Each year's interest is added on before the next year is worked out → Compound interest; Interest is always worked out on the original sum only → Simple interest; The amount grows faster and faster as the years go by → Compound interest; Doubling the time doubles the interest exactly → Simple interest; A population rising by the same percentage every year → Compound interest
- 3. 440
- 4. 840
- 5. 12100
- 6. 1050
- 7. 16200
- 8. 2662