Simple & Compound Interest: The Grade 10 Question Types — Worksheet & Memo

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Grade 10 · Finance and Growth

Simple & Compound Interest: The Grade 10 Question Types

MEMORANDUM

Name:

Class:

Date:

Mark

/ 27

Answer all questions. Show all your working — marks are awarded for method as well as the final answer. Teacher copy: accept any correct equivalent method.

1
R1 000 at 10% simple interest for 2 years — total? (simple)
(2)
1000(1 + 0,10 × 2) = R1 200✓✓ (2)
2
R3 000 at 5% simple interest for 4 years — total? (simple)
(2)
3000(1 + 0,20) = R3 600✓✓ (2)
3
R1 000 at 10% compound for 2 years — total? (compound)
(3)
1000(1,10)² = R1 210✓✓✓ (3)
4
R5 000 at 6% compound for 3 years (to cents). (compound)
(3)
5000(1,06)³ ≈ R5 955,08✓✓✓ (3)
5
Interest on R2 000 at 8% compound over 2 years. (interest)
(3)
2000(1,08)² − 2000 = 2332,80 − 2000 = R332,80✓✓✓ (3)
6
What must you invest at 8% compound to get R5 000 in 3 years? (present value)
(3)
5000 ÷ (1,08)³ ≈ R3 969,16✓✓✓ (3)
7
R500 grows to R650 in 3 years (simple). Find the rate. (rate)
(3)
150 = 500·i·3 = 1500i → i = 10%✓✓✓ (3)
8
A loaf of bread costs R22 today. Inflation has run at 6% p.a. for the past 4 years. What did it cost 4 years ago? (inflation, backwards)
(3)
22 ÷ (1,06)⁴ = 22 ÷ 1,262477 ≈ R17,43✓✓✓ (3)
9
Which is more after 5 years on R1 000 at 10% — simple or compound? (compare)
(3)
Simple: 1 000(1 + 0,1 × 5) = R1 500
Compound: 1 000(1,1)⁵ = R1 610,51
Compound, by R110,51 — it earns interest on interest✓✓✓ (3)
10
A R60 item rises with 8% inflation for 1 year. New price? (inflation)
(2)
60 × 1,08 = R64,80✓✓ (2)

TOTAL: 27 marks