IGCSE Cambridge (CIE) Maths 1 hour 20 questions
Exam Questions
Simple & Compound
Interest
Simple Interest / Compound Interest
Easy (5 questions) /15 Scan here to return to the course
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Medium (6 questions) /16
Hard (9 questions) /40
Total Marks /71
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Easy Questions
1 Ethan invests $6400 at a rate of 2.6% per year simple interest.
Calculate the total value of his investment at the end of 3 years.
$ ................................................
(3 marks)
2 Jamie invests $12000 at a rate of 5% per year compound interest.
Calculate the value of his investment at the end of 3 years.
$ ..............................................
(3 marks)
3 Jan invests $800 at a rate of 3% per year simple interest.
Calculate the value of her investment at the end of 4 years.
$ ....................................
(3 marks)
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4 Sam invests $4500 into a savings account which pays 3.5% compound interest each year.
Find the total amount in the account after 6 years.
(3 marks)
5 Cody is aiming to save $2000 in total.
They invest $1750 in a savings account which pays 6.5% compound interest each year.
How many years will it take for the balance in the account to reach at least $2000?
(3 marks)
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Medium Questions
1 Trina invests $16000 at a rate of 5% per year compound interest.
Work out the value of her investment at the end of 4 years.
$.........................
(2 marks)
2 Gino invests $6000 for 5 years at a rate of 1.2% per year compound interest.
Calculate the value of his investment at the end of the 5 years. Give your answer correct
to the nearest dollar.
$ .................................................
(3 marks)
3 Lucia invests $5000 at a rate of 4.5% per year compound interest.
Calculate the value of her investment at the end of 7 years.
$ ..................................................
(2 marks)
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4 Ella invests $4000 for 3 years at a rate of 1.2% per year compound interest.
Calculate the value of her investment at the end of the 3 years.
$...................................................
(3 marks)
5 Javier invests $750 for 3 years at a rate of 1.8% per year compound interest.
Calculate the value of his investment at the end of the 3 years.
$ ...................................................
(3 marks)
6 Hawa invests $750 at a rate of 3.5% per year compound interest.
Calculate the value of his investment at the end of 3 years.
$ ..............................
(3 marks)
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Hard Questions
1 $12000 is invested at a rate of n% per year simple interest.
At the end of 3 years the value of the investment is $12900.
Find the value of n .
n = .................................
(3 marks)
2 Sonia wants to invest $5000 for 6 years.
Bank A pays compound interest at a rate of 3.5% per year.
Bank B increases the $5000 by 22% at the end of 6 years.
Which bank will give Sonia the most money at the end of 6 years and by how much? You
must show all your working.
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(5 marks)
3 Riya invests $30000 at a rate of 2.5% per year compound interest.
Calculate the value of her investment at the end of 7 years.
Give your answer correct to the nearest dollar.
$ .................................................
(3 marks)
4 (a) Six years ago a farmer invested $3750 at a rate of 4% per year compound interest.
i) Calculate the total value of his investment after the 6 years. Give your answer correct
to the nearest dollar.
$ ............................................... [3]
ii) The farmer wants to spend his investment on buying goats. Goats cost $126 each.
Work out the maximum number of goats he can buy and the amount of money left over.
Number of goats .............................................. Amount of money left over $
............................................... [4]
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(7 marks)
(b) The farmer grows carrots.
In 2018 the selling price for carrots was $96 per tonne.
In 2019 this selling price increased by 18%.
Work out the increase in the selling price from 2018 to 2019.
$ ..............................................
(1 mark)
5 Paula invests $600 at a rate of r % per year simple interest.
At the end of 10 years, the total interest earned is $90.
Find the value of r .
r =........................................
(2 marks)
6 $8400 is invested for 2 years at a rate of 3.5% per year compound interest.
Work out the total amount of interest earned by the end of the 2 years.
$....................................................
(3 marks)
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7 Harry invests $800 for 2 years at a rate of 3% per year compound interest.
Calculate the amount of interest he receives at the end of the 2 years.
$ ...........................
(3 marks)
8 Tomas borrows $5000 for 3 years at a rate of 2.5% per year compound interest.
He pays back the whole amount, with interest, at the end of 3 years.
Calculate the total amount of money he pays back at the end of the 3 years.
$ ..............................
(3 marks)
9 (a) Kim invests £13000 at a rate of 10% per year simple interest.
Calculate the total value of his investment after five years.
(2 marks)
(b) Kim finds another option to invest his £13000.
This second option has a rate of 6% compounded annually.
Find the value of his investment after four years.
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(3 marks)
(c) Kim is looking to invest a £1000 and is choosing between two options.
Option A is a compound interest rate of 10%.
Option B is a simple interest rate of 12%
The two options are shown in the table below.
Year Option A Option B
1 £1100 £1120
2 £1210 £1240
3 £1331 £1360
Option B gives a greater investment than Option A after k years.
Find the smallest integer value of k .
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(4 marks)
(d) Explain why the compound interest rate eventually always returns a greater amount
than simple interest?
(1 mark)
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