Homepage

Course Index

Build a Quiz

Subscriptions

Courses

NSW Y12 Maths Standard 1 NSW Y12 Maths Standard 2 NSW Y12 Maths Advanced NSW Y12 Maths Extension 1 NSW Y12 Maths Extension 2

Topics

Sequences and Series Graphs and Equations Differential Calculus Integration Exponential and Log Function Trig Functions Motion and Rates Series and Finance Descriptive Statistics Bivariant Data Analysis Random Variables

NSW Y12 Maths - Advanced Series and Finance Simple and Compound Interest

Resources for Simple and Compound Interest

  • Questions

    10

    With Worked Solution
    Click Here
  • Video Tutorials

    3


    Click Here
  • HSC Questions

    2

    With Worked Solution
    Click Here

Simple and Compound Interest Theory

The formula for simple interest is \(I=P r n\) where \(I\) is the interest \(r\) is the rate per period of time and \(n\) is the number of periods.\\ The formula for compound interest is \(A=P(1+r)^n\) where \(A\) is the total amount hence \(I=A-P\).\\ \begin{multicols}{2} \textbf{Example 1} \\ %15901 Find the simple interest rate if \$10,000 earns an interest of \$2,000 over a period of 5 years. \\ \textbf{Example 1 solution}\\ $\begin{aligned} I=\operatorname{Prn} \rightarrow 2000 &=10000 \times r \times 5 \\ 2000 &=50000 \times r\\ r &=\frac{2000}{50000} \\ &=0.04 \\ \therefore r &=4\%\ \text{p. a} \end{aligned}$\\ \columnbreak \textbf{Example 2}\\ %15902 Find the compound interest rate if \$10,000 earns an interest of \$2,000 over a period of 5 years.\\ \textbf{Example 2 solution}\\ $\begin{aligned} A=P(1+r)^{n} \rightarrow 12000=10000(1+r)^{5} & \\ \frac{12000}{10000}=(1+r)^{5} \rightarrow 1+r &=(1.2)^{\frac{1}{5}} \\ r &=0.037 \\ r &=3.7\%\ \mathrm{p} \cdot \mathrm{a} \end{aligned}$ \end{multicols}

Create account

I am..

Please enter your details

I agree with your terms of service




Videos

Videos relating to Simple and Compound Interest.

  • Simple and Compound Interest - Video - Compound interest Appreciation

  • Simple and Compound Interest - Video - Compound interest different compounding periods

  • Simple and Compound Interest - Video - Simple v Compound Interest

Plans & Pricing

With all subscriptions, you will receive the below benefits and unlock all answers and fully worked solutions.

  • Teachers Tutors
    Features
    Free
    Pro
    All Content
    All courses, all topics
     
    Questions
     
    Answers
     
    Worked Solutions
    System
    Your own personal portal
     
    Quizbuilder
     
    Class Results
     
    Student Results
    Exam Revision
    Revision by Topic
     
    Practise Exams
     
    Answers
     
    Worked Solutions
  • Awesome Students
    Features
    Free
    Pro
    Content
    Any course, any topic
     
    Questions
     
    Answers
     
    Worked Solutions
    System
    Your own personal portal
     
    Basic Results
     
    Analytics
     
    Study Recommendations
    Exam Revision
    Revision by Topic
     
    Practise Exams
     
    Answers
     
    Worked Solutions