Compound interest and depreciation

What does depreciation mean?

• When something is gaining value

• When something is losing value

• When the value of something remains the same

• When the value of something goes to zero

Sebastian leaves £3000 in the bank for two years. It earns compound interest of 2% per year. Calculate the total amount Sebastian has in the bank at the end of the two years.

Fiona leaves £1600 in the bank for four years. It earns compound interest of 4% each year. Calculate the total amount Fiona has in the bank at the end of the four years, giving your answer to the nearest penny.

A car was bought for £18000. Its value depreciated by 15% each year for the first three years. What was its value at the end of the three years?

Sally bought a piano for £2200. In each year the value of the piano increases by 11% of its value at the start of that year. What is the value of the piano after one year?

Natalie invests £600 for 2 years at 10% per year compound interest. How much interest does she earn after the two years?

• £726

• £720

• £126

• £120

£5200 is invested at 2.8% compound interest per annum. How many full years will it take for the investment to exceed £7000.

• 11

• 10

• 9

• 8

James weighed 100kg. His target was to weigh 80kg or less. His weight decreased by 3% each month. Has he achieved his target after six months?

• Yes, he has lost a lot more

• Yes, he has lost the perfect amount

• No, he still needs to lose more than 10 kg

• No, he still needs to lose a bit more

A fish tank with capacity 150 litres has sprung a leak, at the base of the tank. 5% of the water is lost every minute. How much water is lost from the tank after ten minutes?

Give your answer to 1 d.p.

What do you need to be able to work out compound interest or depreciation question, tick all that apply.

• initial amount

• multiplier

• time period

• final amount

• name of the bank