Understanding and Calculating Compound Interest
Mathematics
General
10 questions
~20 mins
1 views0 downloads
About This Worksheet
This medium level financial worksheet is designed for grade 7 to develop key mathematical skills. It includes 10 engaging problems covering essential concepts in financial. Perfect for classroom practice, homework, or assessment preparation. This worksheet helps students build confidence and proficiency in mathematics through structured practice with clear solutions provided.
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Understanding and Calculating Compound Interest
Subject: MathematicsGrade: General
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Understanding and Calculating Compound Interest
Instructions: Read each question carefully. For calculation questions, show your work clearly. Use a calculator if needed. Answer all questions to the best of your ability.
A
Section 1: Understanding Compound Interest
Learn basic terms and the formula used to calculate compound interest.
1.
Define 'compound interest'.
[2 marks]2.
What is the formula for calculating the amount (A) with compound interest?
[1 mark]AA = P + Prt
BA = P(1 + r)^t
CA = P + rt
DA = P(1 - r)^t
B
Section 2: Calculating Compound Interest
Practice calculating future values and the interest earned using the compound interest formula.
1.
If you invest $1,000 at an annual interest rate of 5% compounded yearly, how much will you have after 3 years? (Round to 2 decimal places)
[2 marks]2.
A principal of $500 is invested at 4% annual compound interest for 5 years. How much interest will be earned in total? (Round to 2 decimal places)
[2 marks]C
Section 3: Comparing Investment Options
Compare different rates and periods to see which investment grows faster.
1.
Which investment will have more money after 4 years: $800 at 3% interest or $800 at 4% interest, both compounded yearly?
[1 mark]AThe 3% interest investment
BBoth will be the same
CThe 4% interest investment
DCannot determine without more information
2.
Compare the future values of $600 invested at 6% for 3 years and $600 at 5% for 4 years. Which one will be higher?
[1 mark]AThe 6% for 3 years
BThe 5% for 4 years
CBoth will be the same
DCannot determine without calculation
D
Section 4: Real-World Applications
Apply your knowledge to real-life financial situations involving savings and loans.
1.
Sarah deposits $200 into a savings account with 3% annual compound interest. How much will her savings be after 5 years? (Round to 2 decimal places)
[2 marks]2.
A loan of $1,500 is taken out with an annual interest rate of 7%, compounded yearly. What will be the total amount owed after 4 years? (Round to 2 decimal places)
[2 marks]3.
Jade wants to save $1,000 for college in 6 years. If her account earns 4% interest compounded annually, how much money must she deposit now to reach her goal? (Round to 2 decimal places)
[2 marks]4.
Emily borrows $500 from the bank with an annual interest rate of 6%, compounded yearly. How much will she owe after 2 years? (Round to 2 decimal places)
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Details
- Created
- 5/10/2025
- Updated
- 12/31/2025
- Type
- worksheet