Interest is money added to savings or loans. Simple interest is always calculated on the original amount

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

Simple and compound interest

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

If you invest £300 for three years and receive 2% simple interest each year, how much will you have at the end? 

If you invest £500 for three years and receive 3% simple interest each year, how much will you have at the end? 

If you invest £1200 for five years and receive 2.5% simple interest each year, how much will you have at the end? 

If you invest £300 for three years and receive 2% compound interest each year, how much will you have at the end (to 2 d.p.)? 

If you invest £500 for three years and receive 2.5% compound interest each year, how much will you have at the end (to 2 d.p.)? 

If I started with £58 and have £61.48 after 3 years in savings with an interest rate of 2%, was the interest simple or compound? 

If a number increases by 0.2% and is now 1252.5, what was it originally? 

If a number decreases by 64% and is now 54, what was it originally? 

Which statement is the equivalent of "Decrease 90 by 20%"?

If a number decreases by 40% and is now 54, what was it originally? 

This lesson will soon be taken down.

Simple and compound interest

Lesson outcome