Compound interest is the interest calculated on the original amount and the interest accumulated over the previous period.

When a number is multiplied by itself multiple times, it can be written more simply in exponential form.

Compound interest calculations with technology

Maths

The ratio unit will cover comparing fractions, percentages and ratios and being able to move fluently between them. This unit ensures pupils have had the opportunity to work with finding the percentage of an amount and the opportunity to calculate interest.

In the prior unit, pupils developed the skills to calculate a given percentage of an amount. In this unit, these skills are extended to performing simple and compound interest calculations.

Percentages

What is the correct multiplier for compound interest over 5 years at 3.2%?

What is the correct multiplier for compound interest over 4 years at 1.5%?

What is the correct multiplier for compound interest over 9 years at 0.7%?

What is the correct multiplier for compound interest over 5 years at 0.5%?

What is the correct multiplier for compound interest over 8 years at 8%?

What is the correct multiplier for compound interest over 12 years at 1.2%?

Heidi has calculated that £50 saved for 3 years with 3% compound interest would return £54.63. What mistake has she made? 

What is the amount of simple 1.9% interest earned on an investment of £900 over 4 years?

The cost of a game increases by 3% each month for 3 months. It now costs £36.06. What was the original price? 

What is the amount of simple 2.7% interest earned on an investment of £25000 over 3 years?

What is the amount of compound 3% interest earned on an investment of £1800 over 2 years?

What is the amount of simple 3.8% interest earned on an investment of £9000 over 3 years?

This lesson will soon be taken down.

Compound interest calculations with technology

Lesson outcome