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Compound interest

Free Printable Compound interest PDF Worksheets, Revision Guide & GCSE Past Paper Questions (Grade 4)

Download free compound interest worksheets (PDF), GCSE maths past paper questions and worked solutions for Compound interest (4A). This is a Grade 4 number topic from the GCSE questions by topic collection for Foundation and Higher tier crossover GCSE Maths (Edexcel, AQA, OCR and IGCSE).

The free PDF worksheets table below brings together printable question booklets (Qs) and worked answers or mark schemes (Ans) from IGCSE MT, Maths Genie, Corbett Maths, Maths Made Easy, Naiker Maths, Dr Austin, 1st Class Maths, Maths4EveryOne, Metatutor, GCSE Maths Rocket, E Classroom and PMT, along with past paper question booklets.

Below the worksheet links you can read our compound interest revision notes and worked examples with diagrams, try real GCSE past paper compound interest questions with step-by-step solutions, or download a PDF of all compound interest worksheet links.

Free Compound interest PDF Worksheets & Answers

Grade 4 • Topic 4A
Resource Questions Answers
GCSE past paper questions & solutions
 Qs Ans
IGCSE (9–1) past paper booklet
 Qs Ans
Graded exam questions & solutions
 Qs Ans
Practice Questions & answers
 Qs Ans
Textbook Exercise & answers
 Qs Ans
MME worksheet & model answers
 Qs Ans
Exam question booklet & solutions
 Qs Ans
Practice grid / worksheet & answers
 Qs Ans
Edexcel exam questions & solutions
 Qs Ans
AQA exam questions & solutions
 Qs Ans
GCSE 9–1 practice booklet & solutions
 Qs Ans
Topic worksheet & worked solutions
 Qs Ans
Practice questions & answers
 Qs Ans
GCSE topic booklet & answers
 Qs Ans
PMT (Edxl)
Edexcel GCSE topic questions & solutions
 Qs Ans
PMT (AQA)
AQA GCSE topic questions & solutions
 Qs Ans
PMT (IGCSE)
Edexcel IGCSE topic questions & solutions
 Qs Ans
Online topic notes & examples
 Page
Self-marking online worksheet
 Page
Grade 4 topics
4A - Compound interest4B - Indices (index laws)
4C - Prime factors HCF and LCM4D - Real life graphs
4E - Inequalities on a number line4F - Solving inequalities
4G - Forming and solving equations4H - nth term of a linear sequence
4J - Expanding and factorising4K - Pythagoras theorem
4L - Angles in parallel lines4M - Angles in polygons
4N - Surface area4P - Volume of a cuboid
4Q - Volume of a prism4R - Bearings
4S - Cylinders4T - Plans and elevations
4U - Scatter graphs4V - Probability
4W - Averages from tables4X - Reverse mean
4Y - Area of a trapezium4Z - Loci and construction
GCSE Maths Grade 4 Revision Notes & Method

Guide to Compound interest: Explanation, Diagrams & Worked Examples

Download Printable One Page Guide (PDF)

Explanation:

Compound interest (and depreciation) applies a percentage change to the new balance at the end of each year. Use the multiplier formula: Final Amount = Original × (Multiplier)n, where n is the number of years.

For a compound increase of r%, the multiplier is 1 + r100 (e.g. +3.5% → 1.035). For depreciation (decrease) of r%, the multiplier is 1 − r100 (e.g. −12% → 0.88). Watch out if the question asks for the interest earned only (subtract the original amount at the end).

Example 1: £4000 is invested for 3 years at 2.5% per annum compound interest. Find the total value after 3 years.

Solution:

Multiplier = 100% + 2.5% = 102.5% = 1.025
Amount = 4000 × 1.025³
= 4307.5625 (round to nearest penny)
Answer: £4307.56

Example 2: A car bought for £15,000 depreciates by 18% per year. Work out its value after 4 years (to the nearest £).

Solution:

Multiplier = 100% − 18% = 82% = 0.82
Value = 15,000 × 0.824 = 6781.824
Answer: £6782
Scanned GCSE Exam Questions & Worked Solutions

GCSE Past Paper Compound interest Questions & Answers

Past Paper Example 1 IGCSE Nov 2021 2F Q23 / 2H Q7 4 marks
Full Paper (PDF) • Mark Scheme (PDF)
Ali and Badia each have 25 000 dollars to invest.
Cyclone BankTornado BankInvest 25 000 dollars4.5% compound interest per yearfor 3 yearsInvest 25 000 dollarsReceive 1150 dollars interest each yearfor 3 years
Ali invests in the Cyclone Bank for 3 years.
Badia invests in the Tornado Bank for 3 years.
By the end of the 3 years, Ali will have received more interest than Badia.
How much more?
Show your working clearly.
Give your answer correct to the nearest dollar.
Worked Solution & Mark Scheme (4 marks)
Ali total = 25000 × 1.045³ = $28529.15 ⇒ Ali interest = $3529.15 M2
Badia interest = 3 × 1150 = $3450 M1
Difference = 3529.15 – 3450 = 79.15 = 79 dollars (or 79 or 80) A1
Answer: 79 dollars
Past Paper Example 2 GCSE Jun 2017 2F Q22 / 2H Q6 3 marks
Full Paper (PDF) • Mark Scheme (PDF)
Anil wants to invest £25 000 for 3 years in a bank.
Personal BankCompound Interest2% for each yearSecure BankCompound Interest4.3% for the first year0.9% for each extra year
Which bank will give Anil the most interest at the end of 3 years?
You must show all your working.
Worked Solution & Mark Scheme (3 marks)
Personal Bank: 25000 × 1.02³ = £26 530.20 (interest = £1530.20) M1
Secure Bank: 25000 × 1.043 × 1.009² = £26 546.46 (interest = £1546.46) M1
Secure Bank gives more interest. A1
Answer: Secure Bank (£26 546.46 vs £26 530.20, or £1546.46 vs £1530.20 interest)
Past Paper Example 3 OCR Jun 2024 5H Q12 5 marks
Full Paper (PDF) • Mark Scheme (PDF)
(a) Sasha invests £1000 at a rate of 5% per year compound interest.
Sasha says:
"After one year, my investment will get £50 in interest and will be worth £1050.
Therefore, after two years, my investment will get another £50 in interest and will be worth £1100."
Is Sasha correct?
Give a reason for your answer.
(b) Sasha buys a car.
The value, £V, of the car after n years is given by the formula
V = a × bn.
The graph shows some information about the value of the car.
(a) Sasha invests £1000 at a rate of 5% per year compound interest.
Sasha says:
"After one year, my investment will get £50 in interest and will be worth £1050.
Therefore, after two years, my investment will get another £50 in interest and will be worth £1100."
Is Sasha correct?
Give a reason for your answer. [1 mark]
(b) Sasha buys a car.
The value, £V, of the car after n years is given by the formula
V = a × bn.
The graph shows some information about the value of the car. [4 marks]
800064001VnNot to scale
Find the value of a and the value of b.
Worked Solution & Mark Scheme (5 marks)
Part (a) Solution:
Compound interest is calculated on the new amount (£1050) in year 2, not the original £1000. C1
Answer (a): No, because in the second year the 5% interest is calculated on £1050 (giving £52.50 interest, total £1102.50).
Part (b) Solution:
When n = 0, V = 8000 ⇒ a = 8000 M3
When n = 1, V = 6400 ⇒ 8000 × b = 6400 ⇒ b = 6400 ÷ 8000 = 0.8. A1
Answer (b): a = 8000, b = 0.8

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