Comparing Types of InterestUnderstand the difference between simple interest and compound interest by comparing their results 
Complete the table to show how much £500 is worth when invested with a 6% annual interest rate. Numbers should be to 2 decimal places.
This is Comparing Types of Interest. You can also try the Interest exercise:
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Level 2
Level 3
Level 4
Level 5
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Percentages  Before starting the Interest exercise make sure you are confident finding percentages of quantities.
Level 1  Investments earning simple interest
Level 2  Investments earning compound interest
Level 3  Loans accruing compound interest
Level 4  Appreciation and depreciation
Level 5  Interest calculated halfyearly, quarterly or monthly
Overdraft Charges  Do you understand how your bank charges you for taking out an overdraft?
Amortisation and Annuities  An exercises containing problems about gradually paying off loans and calculating pension plans.
Exam Style Questions  A collection of problems in the style of GCSE or IB/Alevel exam paper questions (worked solutions are available for Transum subscribers).
More on this topic including lesson Starters, visual aids, investigations and selfmarking exercises.
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See the National Curriculum page for links to related online activities and resources.
\(P\) is the principal, the amount originally invested.
\(r\) is the rate of interest expressed as a percentage.
\(n\) is the number of years the amount was invested for.
\(P\) is the principal, the amount originally invested.
\(r\) is the rate of interest expressed as a percentage.
\(n\) is the number of years the amount was invested for.
Don't wait until you have finished the exercise before you click on the 'Check' button. Click it often as you work through the questions to see if you are answering them correctly. You can doubleclick the 'Check' button to make it float at the bottom of your screen.
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Transum,
Tuesday, September 10, 2024
"As a rough, 'rule of thumb' for compound interest, divide 72 by the percentage interest rate and you’ll have a great estimate for the number of years required for your investment to double."