Simple and Compound Interest Worksheet

**Page 1**

1.

Find the simple interest earned on $2800 deposited in a bank at 2% annual interest after 5 years.

a. | $270 | ||

b. | $280 | ||

c. | $230 | ||

d. | $305 |

The formula used to calculate simple interest is

The rate of interest is 2% =

[Divide the interest rate by 100.]

[Substitute 2800 for

280

[Simplify.]

The interest after 5 years is $280.

Correct answer : (2)

2.

Find the balance on a deposit of $818, earning 4% interest compounded semiannually for 2 years.

a. | $885.08 | ||

b. | $985.08 | ||

c. | $935.08 | ||

d. | $785.08 |

The interest rate

The number of payment periods

The formula used to calculate the balance is B =

= 818(1 + 0.020)

[Substitute 818 for

= 818(1.020)

[Add inside the grouping symbols.]

= 885.08

[Simplify and round to nearest cent.]

The balance after 2 years is about $885.08

Correct answer : (1)

3.

Marissa deposited $900 in her savings account. The rate of simple interest is 5% per year. Find the balance at the end of 4 years.

a. | $720 | ||

b. | $1080 | ||

c. | $180 | ||

d. | None of the above |

[Use the simple interest formula.]

= 900 × 4 × 0.05

[Substitute 0.05 for 5%.]

= $180

Balance = Interest + Principal = $180 + $900 = $1080.

Correct answer : (2)

4.

Mrs. Olga did not pay her electricity bill of $300 for the month of July. An interest of 3% per month is charged on any unpaid bill. Find the total amount charged if Mrs. Olga pays the bill after 2 months.

a. | $309 | ||

b. | $318.27 | ||

c. | $309.27 | ||

d. | None of the above |

[Use the simple interest formula.]

= 300 x 0.03 x 1

[Substitute 0.03 for 3%.]

= $9

At the end of the first month Mrs. Olga owes 300 + 9 = $309

Interest at the end of the second month =

[Use the simple interest formula.]

= 309 x 0.03 x 1

= $9.27

[Multiplying.]

The total amount Mrs. Olga owes after 2 months = 309 + 9.27 = $318.27

Correct answer : (2)

5.

Find the simple interest for 3 years at a rate of 5% on $200.

a. | $60 | ||

b. | $90 | ||

c. | $30 | ||

d. | None of the above |

[Use the simple interest formula.]

= 200 × 0.05 × 3

[Substitute 0.05 for 5%.]

= $30

Correct answer : (3)

6.

Find the balance at the end of 4 years if $10000 is deposited at the rate of $1\frac{1}{2}$% simple interest.

a. | $10610 | ||

b. | $10605 | ||

c. | $10600 | ||

d. | None of the above |

[Use the simple interest formula.]

= 10000 ×

[Substitute

= $600

[Simplify.]

Balance = Interest + Principal

= $600 + $10000 = $10600

[Substitute the values and simplify.]

Correct answer : (3)

7.

A credit card company charges compound interest annually on any unpaid debts at 5%. Mr. Brian now has outstanding debt of $4200. What will be his outstanding debt 3 years from now?

a. | $4922 | ||

b. | $4822 | ||

c. | $4852 | ||

d. | $4872 |

[Use the compound interest formula.]

= 4200 x (1 + 0.05)

[Substitute 0.05 for 5%.]

= 4200 x 1.16

[Simplify.]

= $4872

Correct answer : (4)

8.

Mr. Jones deposited $8000 in a bank that pays a simple interest of 7% per year. Find the balance in his account at the end of 5 years .

a. | $10800 | ||

b. | $10300 | ||

c. | $10600 | ||

d. | $9800 |

[Use the simple interest formula.]

= 8000 × 0.07 × 5 = $2800

[Substitute 0.07 for 7%.]

Balance = Principal + Interest

= $8000 + $2800 = $10800

[Substitute the values and add.]

Correct answer : (1)

9.

Chris deposited $445 in an account at his school bank, where the rate of interest is 3.4% per year. Find the balance he withdraws at the end of 2 years, if he gets a simple interest.

a. | $475.26 | ||

b. | $575.26 | ||

c. | $425.26 | ||

d. | $375.26 |

[Use the simple interest formula.]

= 445 x 0.034 x 2 = $30.26

[Substitute 0.034 for 3.4% and simplify.]

Balance = Principal + Interest

= $445 + $30.26 = $475.26

[Substitute the values and add.]

Correct answer : (1)

10.

Find the balance in Mrs. Charlie's account after 6 years, if she had deposited $11000 in her account 4 years ago. The bank pays a simple interest of 8.4% annually.

a. | $21240 | ||

b. | $19240 | ||

c. | $19740 | ||

d. | $20240 |

Interest =

[Use the simple interest formula.]

= 11000 x 0.084 x 10 = $9240

[Substitute 0.084 for 8.4% and simplify.]

Balance = Principal + Interest

= 11000 + 9240 = 20240

[Substitute the values and add.]

So, the balance in Mrs. Charlie's account after 6 years is $20240.

Correct answer : (4)