Simple Interest (WJEC GCSE Maths & Numeracy (Double Award)): Revision Note

Double check:

• Does the question ask for the interest earned, or the total amount at the end?

• Do you need to round your answer? (e.g. to the nearest hundred)

A bank account offers simple interest of 4% per year. Nigel puts £ 250 into this bank account, and leaves it to earn interest for 6 years.

(a) Find the total amount of interest earned over the 6 year period.

Answer:

Each year, 4% of the starting amount is added as interest
Find 4% of £ 250 using a multiplier

0.04 × 250 = 10

This amount of interest is earned every year, for 6 years

10 × 6 = 60

£ 60 of interest is earned 

(b) Find the total amount in the bank account at the end of the 6 year period.

Answer:

Add the amount of interest earned, found in part (a), to the starting amount

250 + 60 = 310

£ 310

Noah invests £ 9000 at a rate of  simple interest per year, for 5 years. At the end of 5 years there is £ 11 700 in the account. Find the value of .

Answer:

Find the total amount of interest earned over the 5 years

11 700 - 9 000 = £ 2 700 total interest

As we are dealing with simple interest, the same amount of interest is earned each year
Find the interest earned each year

2 700 ÷ 5 = £ 540 interest per year

Find what percentage of the original amount this represents

£ 540 is 6% of the original £ 9000