New
New
Year 10
Foundation

Simple interest calculations with technology

I can carry out simple interest calculations with a calculator.

New
New
Year 10
Foundation

Simple interest calculations with technology

I can carry out simple interest calculations with a calculator.

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Lesson details

Key learning points

  1. Calculators are very useful here as they can be programmed efficiently.
  2. This saves time and can reduce error.
  3. It is also quick to reverse the process to find the original amount.
  4. The use of a multiplier ensures greater efficiency.

Keywords

  • Simple interest - Interest is money added to savings or loans. Simple interest is always calculated on the original amount

  • Compound interest - Compound interest is the interest calculated on the original amount and the interest accumulated over the previous period.

Common misconception

A single digit percentage is incorrectly worked out by dividing by 10 and not 100 e.g 3% = 0.3, e.g. 0.54% = 0.054

Dividing the percentage by 100 gives the decimal equivalent i.e 0.54% = 0.0054

If pupils had £x in their bank account, what simple interest rate (<6%) per year and number of years would be needed to double this amount? This allows pupils to understand the product of the rate and years needing to be 1. For a challenge, give examples of S.I and years for tripling the amount.
Teacher tip

Licence

This content is © Oak National Academy Limited (2024), licensed on Open Government Licence version 3.0 except where otherwise stated. See Oak's terms & conditions (Collection 2).

Lesson video

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6 Questions

Q1.
If I increase £45 to £126, what is the percentage gain?
Correct Answer: 180%, 180
Q2.
Find 52% of 800
Correct Answer: 416
Q3.
A data analyst celebrates his investment increasing by 14% which is now worth £1094.40. How much did he originally invest?
Correct Answer: 960, £960
Q4.
Increase 11 by 15%
Correct Answer: 12.65
Q5.
If I decrease £48 to £12, what is the percentage loss?
Correct Answer: 75%, 75, -75%, -75
Q6.
If I increase £75 to £97.50, what is the percentage gain?
Correct Answer: 30, 30%

6 Questions

Q1.
What is the amount of simple 1.3% interest earned on an investment of £400 over 6 years?
Correct answer: £31.20
£34.20
£32.23
Q2.
What is the amount of simple 1.6% interest earned on an investment of £500 over 4 years?
£32.78
Correct answer: £32
£32.50
Q3.
What is the amount of simple 2.8% interest earned on an investment of £638 over 10 years?
£202.91
Correct answer: £178.64
£178.64
Q4.
What is the amount of compound 2.8% interest earned on an investment of £638 over 10 years?
Correct answer: £202.91
£178.64
£178.64
Q5.
What is the amount of compound 4.9% interest earned on an investment of £230 over 8 years (to 2 d.p.)?
Correct Answer: 107.23, £107.23
Q6.
What is the amount of compound 2.3% interest earned on an investment of £1000 over 20 years (to 2 d.p.)?
Correct Answer: 575.84, £575.84