The smart way to improve grades

Comprehensive & curriculum aligned

Affordable pricing from £10/month

Compound Interest (2)

In this worksheet, students answer questions based on compound interest rates given as percentages.

'Compound Interest (2)' worksheet

Key stage:  KS 4

Curriculum topic:  Ratio, Proportion and Rates of Change

Curriculum subtopic:  Set Up, Solve and Interpret Answers in Growth and Decay Problems

Difficulty level:  

down

Worksheet Overview

QUESTION 1 of 10

Compound Interest is the amount of money earned on a sum that has been invested including the interest added each year.

It is usually written as a percentage of the money invested for each year (per annum or p.a.)

 

Example 1

Jack invests £250 at 1.5% compound interest p.a. 

How much compound interest is earned after three years?

 

Answer

When we increase something by 1.5%, we can use the percentage multiplier 1.015.

 

After 1 year, Jack has £250 x 1.015 = £253.75

After 2 years, Jack has £253.75 x 1.015 = £257.55625

After 3 years, Jack has £257.55625 x 1.015 = £261.41959... ≈ £261.42

 

Compound interest earned = £261.42 - £250 = £11.42

 

Example 2

Jack invests £250 at 1.5% compound interest p.a. 

How much compound interest is earned after ten years?

 

Answer

When we increase something by 1.5%, we can use the percentage multiplier 1.015.

 

After 1 year, Jack has £250 x 1.015 = £253.75

After 2 years, Jack has £250 x 1.015² = £257.55625

After 3 years, Jack has £250 x 1.015³ = £261.41959...

 

After 10 years, Jack has £250 x 1.015¹º = 290.1352...

 

Interest earned = £250 x 1.015¹º - £250 ≈ £40.14

Jack invests £2500 at 2% interest p.a. 

 

How much compound interest is earned after two years?

 

(Write your answer in £s without the £ sign)

Sue invests £200 at 2% interest p.a. 

 

How much compound interest is earned after three years?

 

(Write your answer in £s without the £ sign)

Bill invests £1000 at 2.5% interest p.a. 

 

How much compound interest is earned after three years?

 

(Write your answer in £s without the £ sign)

Fred invests £20000 at 4% interest p.a. 

 

How much compound interest is earned after two years?

 

(Write your answer in £s without the £ sign)

Ann invests £10000 at 6% interest p.a. 

 

How much compound interest is earned after two years?

 

(Write your answer in £s without the £ sign)

Amy invests £10500 at 5.5% interest p.a. 

 

How much compound interest is earned after two years?

 

(Write your answer in £s without the £ sign)

Amy invests £15000 at 7.5% interest p.a. 

 

How much compound interest is earned after three years?

 

(Write your answer in £s without the £ sign)

William invests £50000 at 3% interest p.a. 

 

How much compound interest is earned after three years?

 

(Write your answer in £s without the £ sign)

William invests £50000 at 3% interest p.a. 

 

How much compound interest is earned after five years?

 

(Write your answer in £s without the £ sign)

Kate invests £65000 at 8.5% interest p.a. 

 

How much compound interest is earned after ten years?

 

(Write your answer in £s without the £ sign)

  • Question 1

Jack invests £2500 at 2% interest p.a. 

 

How much compound interest is earned after two years?

 

(Write your answer in £s without the £ sign)

CORRECT ANSWER
101
101.00
EDDIE SAYS
2500 × 1.02²- 2500
  • Question 2

Sue invests £200 at 2% interest p.a. 

 

How much compound interest is earned after three years?

 

(Write your answer in £s without the £ sign)

CORRECT ANSWER
12.24
EDDIE SAYS
200 × 1.02³ - 200
  • Question 3

Bill invests £1000 at 2.5% interest p.a. 

 

How much compound interest is earned after three years?

 

(Write your answer in £s without the £ sign)

CORRECT ANSWER
76.89
EDDIE SAYS
1000 × 1.025³ - 1000
  • Question 4

Fred invests £20000 at 4% interest p.a. 

 

How much compound interest is earned after two years?

 

(Write your answer in £s without the £ sign)

CORRECT ANSWER
1632.00
1632
EDDIE SAYS
20000 × 1.04² - 20000
  • Question 5

Ann invests £10000 at 6% interest p.a. 

 

How much compound interest is earned after two years?

 

(Write your answer in £s without the £ sign)

CORRECT ANSWER
1236.00
1236
EDDIE SAYS
10000 × 1.06² - 10000
  • Question 6

Amy invests £10500 at 5.5% interest p.a. 

 

How much compound interest is earned after two years?

 

(Write your answer in £s without the £ sign)

CORRECT ANSWER
1186.76
EDDIE SAYS
10500 × 1.055² - 10500
  • Question 7

Amy invests £15000 at 7.5% interest p.a. 

 

How much compound interest is earned after three years?

 

(Write your answer in £s without the £ sign)

CORRECT ANSWER
3634.45
EDDIE SAYS
15000 × 1.075³ - 15000
  • Question 8

William invests £50000 at 3% interest p.a. 

 

How much compound interest is earned after three years?

 

(Write your answer in £s without the £ sign)

CORRECT ANSWER
4636.35
EDDIE SAYS
50000 × 1.03³ - 50000
  • Question 9

William invests £50000 at 3% interest p.a. 

 

How much compound interest is earned after five years?

 

(Write your answer in £s without the £ sign)

CORRECT ANSWER
7963.70
EDDIE SAYS
50000 × 1.035 - 50000
  • Question 10

Kate invests £65000 at 8.5% interest p.a. 

 

How much compound interest is earned after ten years?

 

(Write your answer in £s without the £ sign)

CORRECT ANSWER
81963.92
EDDIE SAYS
65000 × 1.08510 - 65000
---- OR ----

Sign up for a £1 trial so you can track and measure your child's progress on this activity.

What is EdPlace?

We're your National Curriculum aligned online education content provider helping each child succeed in English, maths and science from year 1 to GCSE. With an EdPlace account you’ll be able to track and measure progress, helping each child achieve their best. We build confidence and attainment by personalising each child’s learning at a level that suits them.

Start your £1 trial

Start your trial for £1