Compound and simple interest rates gcse maths revision. Interest is the fixed amount paid on borrowed money. A common application of exponential growth is compound interest. It is useful to begin with basic amounts such as 10 percent. It consists of six carbon atoms joined together in a ring, with a hydrogen atom bonded to each carbon. This video shows you how to calculate compound interest and looks at exam style questions. Compound interest problems with answers and solutions are presented free practice for sat, act and compass maths tests. The method used to solve the problem will depend on what we are trying to find. Its important to note with simple interest the amount earned will stay the same every year. Next percentages of an amount calculator practice questions. How to calculate simple and compound interest dummies.
Before discussing compound interest, students will need to understand how interest is calculated. This data will be helpful in determining the interest and amount in case of compound interest easily. A collection of 91 maths gcse sample and specimen questions from aqa. Compound interest is interest earned or paid on both the principal and previously earned interest. This video explains how to answer compound interest questions. Compound interest how to calculate compound interest. Subtract the principal if you want just the compound interest.
Download mathematics linear 1ma0 compound interest and depreciation book pdf free download link or read online here in pdf. Solving compound interest problems to solve compound interest problems, we need to take the given information at plug the information into the compound interest formula and solve for the missing variable. Do well on your igcse gcse maths exam and let help you with your maths revision. Fixed rate has been calculated as simple interest and it states it is compound interest. As the principal grows, the rate at which you earn interest grows as well, because you are earning interest on interest.
Recall that simple interest is earned or paid only on the principal. Its important to have at least a basic understanding of how a company or bank determines the interest rate you earn on your money on deposit. Learn about and revise how to calculate percentages to solve real life problems, such as compound interest, with this bbc bitesize gcse edexcel guide. From the data it is clear that the interest rate for the first year in compound interest is the same as that in case of simple interest, ie. Multiply the principal amount by one plus the annual interest rate to the power of the number of compound periods to get a combined figure for principal and compound interest. Simple interest is where the amount of interest earned is fixed over time.
Compound interest is interest on a principal sum and any of its accrued interest often called interestoninterest. Simple and compound interest, this section of revision maths explains the difference between simple and compound interest and how to calculate them. Compound interest is not always calculated per year, it could be per month, per day, etc. Compound interest exam questions mathscast youtube. Step by step, by studying example maths questions, activities and maths works. A business declares that, in each year, its office equipment depreciates at the rate of 18% of its value at the beginning of that year. Compound interest gcse maths tutorials, revision and. For your gcse maths exam you need to know about two different types of interest rates, simple interest and compound interest. The selection covers all of the ions gcse students are likely to come across, as well as the vast majority of those that will be encountered by a level students. This video is all about compound interest and forms part of the playlist on how to work with compound interest. So the next year the interest is worked out on a larger amount of money than what was originally borrowed.
They are classified as functional maths, meaning that you might use this type of calculation in. Compound interest working out the number of years gcse. Benzene is a hugely important compound in organic chemistry. Compound interest practice questions click here for questions. Conclusion is correct but the comparable figures that would support it are wrong. For example, 4000 dollars is deposited into a bank account and the annual interest rate is 8%. The sum of the principal and interest is called the amount. Cumulative increase and decrease compound interest. Round your answers to the nearest pound where necessary.
Gcse revision simple and compound interest teaching. Lesson 2 compound interest an investment earns compound interest when the interest from each time period is added to the principal, and then earns interest in the following time periods. For each question it is assumed no money is withdrawn or deposited into the account after the original deposit. This resource can be printed in colour or black and white. Level 3 mathematical studies core maths key stage 3. Read online mathematics linear 1ma0 compound interest and depreciation book pdf free download link book now.
Compound interest, or interest on interest, is calculated with the compound interest formula. It is most commonly calculated when reinvesting earnings gained from interest on a sum back into the original deposit, thus greatly increasing the amount gained by the investor. Passing n5 maths significantly increases your career opportunities by helping you gain a place on a college course. Edexcel gcse mathematics linear 1ma0 compound interest and depreciation materials required for examination items included with question papers ruler graduated in centimetres and nil millimetres, protractor, compasses, pen, hb pencil, eraser.
Here the interest is added to the principal at the end of each year. Whats the difference between simple and compound interest, anyway. Calculate the value of his investment, correct to the nearest penny. Ive also added to the playlist on gcse higher revision. Calculate the total amount sebastian has in the bank at the end of. Gcse revision simple and compound interest there are four worksheets each with a hard exam style simple and compound interest comparison word problem and a further worksheet with 6 questions.
Mathematics linear 1ma0 compound interest and depreciation. Gcse maths 8300 gcse statistics 8382 alevel maths and further maths. Compound interest is the type of interest that is more normally paid out by banks to savers. All books are in clear copy here, and all files are secure so dont worry about it. Explain that banks pay people interest on money in savings accounts. It covers how to approach calculator and noncalculator questions. The video ends with some practice questions and answers. If i intend to leave my money on my account for five years, would i rather receive simple or compound interest. Simple and compound 8 interest interest is the fee paid for borrowed money. Compound interest definition, formula, derivation, examples. Simple and compound interest extension worksheet answers 3 download file 220. Compound growth and decay worksheets questions and revision.
Understand how to calculate compound interest and pass your maths exams. Compound interest using a formula questions are fairly popular on gcse mathematics papers. Gcse aqa, ocr, edexcel gcse maths compound, simple interest and depreciation questions name. Compound interest using a formula questions are fairly popular on gcse mathematics papers, usually around question 10, in the middle of the paper. Past paper exam questions organised by topic for edexcel gcse maths. Previous increasingdecreasing by a percentage practice questions. If you dont pay off any of the loan in 4 years, how much would you. How to work out compound interest using a formula gcse maths.
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