Test 3. Compound interest-type problems

 1. What is the percentage multiplier to find a 15% decrease? (Hint: what percentage would you have left after you have taken off 15%?)

 а)  £0.82;      b)  £0.76;     

 c)  £0.85;      d)  £0.65.

 2. The value of a car depreciates (goes down) by 15% of its value each year. Sally buys the new car for £16000. How much will the cfr be worth after 7 years?

 а)  £5128.53;     

 b)  £5129.60;     

 c)  £5129.27;     

 d)  £5129.23.

 3. The value of a washing machine depreciates by 25% of its value each year. If a new washing machine costs £480, how much will it be worth after 6 years?

 а)  £86.43;      b)  £85.43;     

 c)  £85.48;      d)  £85.75.

 4. If a 15-year old person put £500 in a bank at 9% p. a. compound interest and left it in the bank for 50 years until retirement, how much money would be in the bank?

 а)  £37,178.76;     

 b)  £37,176.66;     

 c)  £37,179.78;     

 d)  £37,178.44.

 5. At the end of any year the value of a car is 20% lower that at the beginning of that year. At the beginning of the year 1 bought a car for £5000. Work out how much my car is worth 2 years later.

 а)  £3220;      b)  £3200;     

 c)  £3180;      d)  £3000.

 6. Josie invests £800 in an account that pays her 3% simple interest every year. How much interest will she have been paid in total after 6 years?

 а)  £134;      b)  £184;     

 c)  £148;      d)  £144.

 7. Each year the value of a cooker falls by 8% of its value at the beginning of that year. Sally bought a new cooker on 1st January 2001. By 1st January 2002 its value fallen by 8% to £598. Work out the value of the new cooker on 1st January 2001.

 а)  £640;      b)  £655;     

 c)  £650;      d)  £670.

 8. Each year the value of a cooker falls by 8% of its value at the beginning of that year. Sally bought a new cooker on 1st January 2001. By 1st January 2002 its value fallen by 8% to £598. Work out the value of the cooker by 1st January 2005. Give your answer to the nearest penny.

 а)  £465.68;     

 b)  £465.66;     

 c)  £464.40;     

 d)  £465.16.

 9. £4000 is inversed at 5% per annum (year) compound interest. How much money will there be after 2 years?  

 а)  £4410;      b)  £4412;     

 c)  £4430;      d)  £4405.

10. £10,000 is invested at 10% per annum compound interest. How much money will there be after 3 years?

 а)  £13410;      b)  £13325;     

 c)  £13315;      d)  £13310.

11. £6000 is invested at 4% per annum compound interest. How much money will there be after 2 years?

 а)  £6489.40;     

 b)  £6488.60;     

 c)  £6489.60;     

 d)  £6488.85.

12.  A new car is bought for £14000. Each year, its value depreciates (goes down) by 20% of its value at the start of the year. How much is the car worth after 2 years?

 а)  89.45;      b)  89.60;     

 c)  88.60;      d)  89.68.