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Stage 5.1

7.05 Compound interest

Worksheet
Compound interest tables
1

\$ 3200 is invested for three years at a rate of 6\% p.a., compounded annually.

a

Complete the table below to determine the final value of the investment.

Balance at beginning of yearInterest earned
First year\$3200\$192
Second year\$3392\$203.52
Third year
Fourth year-
b

Calculate the total interest earned over the three years.

2

\$3500 is invested for three years at a rate of 10\% p.a., compounded annually.

a

Complete the table below to determine the final value of the investment.

Balance at beginning of yearInterest earned
First year\$3500\$350
Second year\$3850\$385
Third year
Fourth year-
b

Calculate the total interest earned over the three years.

3

\$7400 is invested for three years at a rate of 10\% p.a., compounded annually.

a

Complete the table below to determine the final value of the investment.

Balance at beginning of yearInterest earned
First year\$7400\$740
Second year\$8140\$814
Third year
Fourth year-
b

Calculate the total interest earned over the three years.

Compound interest formula
4

Tara borrows \$5000 at a rate of 4.5\% p.a., compounded annually.

a

After 3 years, Tara repays the loan all at once. How much money does she pay back in total?

b

How much interest was generated on the loan over the three years?

5

Ivan borrows \$3000 at a rate of 6.9\% p.a., compounded annually.

a

After 6 years, Ivan repays the loan all at once. How much money does he pay back in total?

b

How much interest was generated on the loan over the six years?

6

Bill invests \$21\,000 at a rate of 2.4\% p.a., compounded quarterly.

a

After 3 years, Bill withdraws the investment all at once. How much money is his investment worth after 3 years?

b

How much interest was generated by the investment over the three years?

7

Victoria borrows \$35\,000 at a rate of 4.8\% p.a., compounded monthly.

a

After 4 months, Victoria repays the loan all at once. How much money does she pay back in total?

b

How much interest was generated on the loan over the four months?

8

Emma invests \$24\,500 at a rate of 3.6\% p.a., compounded monthly.

a

After 5 months, Emma withdraws the investment all at once. How much money is her investment worth at the time of withdrawing?

b

How much interest was generated by the investment over the five months?

9

Avril invests \$4000 at an interest rate of 2.1\% p.a., compounded annually. After how many years will Avril's investment be greater than \$4600?

10

Rosey invests \$15\,000 at an interest rate of 2.1\% p.a., compounded annually. After how many years will Rosey's investment be greater than \$15\,500?

11

Bill invests \$15\,000 at an interest rate of 2.8\% p.a., compounded annually. After how many years will Bill's investment be greater than \$17\,500?

12

Luigi invests \$17\,500 at an interest rate of 2.4\% p.a., compounded annually. After how many years will Luigi's investment be greater than \$19\,900?

Appreciation and depreciation
13

A new book depreciates in value by 6.6\% every month. The book is currently valued at \$60.

a

How much will the book be valued at in one months time?

b

How much will the book be valued at in two months time?

c

Calculate the value of the book in 4 months time.

14

A rare pen appreciates in value by 1.5\% every month. The pen is currently valued at \$300.

a

How much will the pen be valued at in one months time?

b

How much will the pen be valued at in two months time?

c

Calculate the value of the pen in 4 months time.

15

An antique crown appreciates in value by 3.8\% every year. The crown is currently valued at \$2500.

a

How much will the crown be valued at in one year's time?

b

How much will the crown be valued at in two years' time?

c

Calculate the value of the crown in 5 years' time.

16

A new motorbike depreciates in value by 8.6\% every year. The motorbike is currently valued at \$21\,000.

a

How much will the motorbike be valued at in one year's time?

b

How much will the motorbike be valued at in two years' time?

c

Calculate the value of the motorbike in 5 years' time.

17

Han purchased a \$7400 TV, which depreciates at a compounded rate of 15\% p.a.

a

Find the depreciation for the following years:

i

First year

ii

Second year

b

Find the expected value after the following years:

i

First year

ii

Second year

c

Find the total depreciation over the two years.

d

Find the percentage of the original value remaining after two years.

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MA5.1-4NA

solves financial problems involving earning, spending and investing money

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