The rate of interest is the percentage by which an amount increases

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 interest calculations

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 I invest £400 over 3 years at 2% interest, I have £424. Is this simple or compound interest? 

If I invest £600 over 2 years at 2.5% interest, I have £630.38. Is this simple or compound interest? 

If I invest £1500 over 5 years at 1.9% interest, I have £1642.50. Is this simple or compound interest? 

If I invest £10 over 2 years at 4% interest, I have £10.80. Is this simple or compound interest? 

If I invest £46.21 over 1 year at 4% interest, I have £48.06. Is this simple or compound interest? 

The simple interest investment produces more money.

The compound interest investment produces more money.

Which investment results in more money at the end: an investment of £30 at a rate of 2% simple interest for 4 years, or £30.50 at a rate of 3.5% compound interest for 2 years?

Which statement is the equivalent of "Increase 76 by 30%"?

If I increase £90 to £99, what is the percentage gain? 

If you invest £500 for three years and receive 2% simple interest each year, how much will you have at the end? 

If I increase £70 to £86.10, what is the percentage gain? 

Which statement is the equivalent of "Decrease 130 by 40%"?

If I increase £80 to £86.40, what is the percentage gain? 

Starter Quiz