Compound Interest and Depreciation - Worksheets, Questions and Revision

21 original exam-style questions - 6 pages of questions with a full mark scheme - free printable PDF.

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GCSE · Ratio, Proportion and Rates of Change

4.1 Compound Interest and Depreciation

EDEXCEL 1MA1 · Calculator allowed · about 85 minutes
Total Marks
Name: _______________________________    Date: ____ / ____ / ______
Answer ALL questions. Show all your working.
1
Which multiplier would be used to increase an amount by 12%?
  • A) 0.12
  • B) 1.12
  • C) 1.2
  • D) 12.12
(Total for Question 1 is 1 mark)
2
Which multiplier would be used to decrease an amount by 8%?
  • A) 1.08
  • B) 0.92
  • C) 0.8
  • D) 0.08
(Total for Question 2 is 1 mark)
3
Amelia puts 600 pounds into a savings account that pays simple interest at a rate of 2% per year. Calculate the total amount in the account after 3 years.
(Total for Question 3 is 2 marks)
4
Ben invests 750 pounds in an account that pays compound interest at a rate of 4% per year. Work out the value of his investment after 1 year.
(Total for Question 4 is 2 marks)
5
Sam invests 300 pounds in an account that pays compound interest at a rate of 6% per year.
(a)Sam invests 300 pounds in an account that pays compound interest at a rate of 6% per year. Write down the multiplier, as a decimal, that represents a 6% increase.(1)
(b)Use your multiplier to work out the value of Sam's investment after 2 years.(2)
(Total for Question 5 is 3 marks)
6
Chloe invests 1200 pounds in a savings account that pays compound interest at a rate of 3% per year. Calculate the value of her investment after 2 years. Give your answer to the nearest penny.
(Total for Question 6 is 3 marks)
7
A car is bought for 9000 pounds. It depreciates in value by 15% per year. Work out the value of the car after 2 years.
(Total for Question 7 is 3 marks)
8
Show that investing 800 pounds at a compound interest rate of 5% per year gives a value of 882 pounds after 2 years.
(Total for Question 8 is 3 marks)
9
Bilal invests 950 pounds in an account that pays compound interest at a rate of 2% per year. Calculate the value of his investment after 4 years. Give your answer to the nearest penny.
(Total for Question 9 is 3 marks)
10
Priya invests 2500 pounds in a savings account that pays compound interest at a rate of 2.5% per year. Calculate the total interest she earns after 3 years. Give your answer to the nearest penny.
(Total for Question 10 is 4 marks)
11
Priti invests 500 pounds for 3 years. She compares two different types of account.
(a)Priti invests 500 pounds in an account that pays simple interest at a rate of 4% per year. Calculate the total amount in the account after 3 years.(2)
(b)Priti's friend invests 500 pounds in a different account that pays compound interest at a rate of 4% per year. Calculate the total amount in this account after 3 years. Give your answer to the nearest penny.(3)
(c)State which account gives the greater return, and work out by how much.(1)
(Total for Question 11 is 6 marks)
12
A car is bought new for 18000 pounds. It depreciates by 25% in its first year and by a further 12% in its second year. Work out the value of the car after 2 years.
(Total for Question 12 is 4 marks)
13
Nia is investing 500 pounds at a compound interest rate of 6% per year for 3 years.
(a)To find the value of 500 pounds invested at a compound interest rate of 6% per year for 3 years, Nia calculated 500 x 0.06 x 3 = 90, and gave the total value as 590 pounds. Identify the error in Nia's method.(1)
(b)Work out the correct total value of the investment after 3 years. Give your answer to the nearest penny.(3)
(Total for Question 13 is 4 marks)
14
A laptop depreciates in value by 20% during its first year of use. After one year it is worth 640 pounds. Work out the original price of the laptop.
(Total for Question 14 is 3 marks)
15
Tom invests 3000 pounds in an account that pays compound interest at a rate of 3% per year. Use trial and improvement to find the number of complete years after which his investment first exceeds 3500 pounds.
(Total for Question 15 is 3 marks)
16
Deepa and her brother each invest 2000 pounds for 5 years, in different types of account.
(a)Account A pays compound interest at a rate of 2.5% per year. Deepa invests 2000 pounds in Account A. Calculate the total amount in Account A after 5 years. Give your answer to the nearest penny.(3)
(b)Account B pays simple interest at a rate of 3% per year. Deepa's brother invests 2000 pounds in Account B. Calculate the total amount in Account B after 5 years.(2)
(c)State which account gives the greater return after 5 years, and work out by how much.(2)
(Total for Question 16 is 7 marks)
17
A vintage guitar increases in value (appreciates) by 4% per year. Marcus bought the guitar for 1200 pounds. Work out its value after 3 years. Give your answer to the nearest penny.
(Total for Question 17 is 3 marks)
18
A machine was bought for 5000 pounds. After 2 years it is worth 4050 pounds. The machine depreciated by the same percentage each year. Work out the annual rate of depreciation.
(Total for Question 18 is 3 marks)
19
A van depreciates by 20% in its first year and by a further 15% in its second year. After 2 years the van is worth 5100 pounds. Work out the original value of the van.
(Total for Question 19 is 3 marks)
20
Fatima invests 4000 pounds in an account that pays compound interest at a rate of 3% per year for the first 2 years. After 2 years the interest rate changes to 5% per year for the third year. Work out the value of her investment after 3 years. Give your answer to the nearest penny.
(Total for Question 20 is 4 marks)
21
An investment of 2000 pounds grows to 2282.33 pounds after 3 years of compound interest. Use trial and improvement to find the annual rate of interest, correct to 1 decimal place.
(Total for Question 21 is 4 marks)
Mark scheme · 4.1 Compound Interest and Depreciation

Question 1

Question 2

Question 3

Question 4

Question 5

Question 6

Question 7

Question 8

Question 9

Question 10

Question 11

Question 12

Question 13

Question 14

Question 15

Question 16

Question 17

Question 18

Question 19

Question 20

Question 21