Canada Grade 8 Math Interest (simple and compound)

If you invest $500 at a simple interest rate of 5% per annum, how much interest will you earn after 3 years?

• $50

• $75

• $100

• $150

Answer explanation

To calculate simple interest, use the formula: Interest = Principal x Rate x Time. Here, Interest = $500 x 0.05 x 3 = $75. Therefore, the correct answer is $75.

What is the total amount after 2 years if $1,000 is invested at a simple interest rate of 4% per annum?

• $1,040

• $1,080

• $1,100

• $1,120

Answer explanation

To calculate the total amount after 2 years with simple interest, use the formula: Total = Principal + (Principal x Rate x Time). Here, Total = 1000 + (1000 x 0.04 x 2) = 1000 + 80 = $1,080.

If $800 is invested at a compound interest rate of 6% per annum, compounded annually, what will be the total amount after 2 years?

• $848

• $896

• $899.52

• $900

Answer explanation

To find the total amount after 2 years with compound interest, use the formula A = P(1 + r)^n. Here, P = 800, r = 0.06, and n = 2. Thus, A = 800(1 + 0.06)^2 = 800(1.1236) = 899.52. Therefore, the correct answer is $899.52.

Calculate the simple interest on a principal of $1,200 at a rate of 3% per annum for 4 years.

• $120

• $144

• $150

• $160

Answer explanation

To calculate simple interest, use the formula: Interest = Principal x Rate x Time. Here, Interest = $1200 x 0.03 x 4 = $144. Thus, the correct answer is $144.

What is the compound interest on $500 at a rate of 10% per annum, compounded annually, after 3 years?

• $150

• $161.05

• $165.50

• $175.50

Answer explanation

To calculate compound interest, use the formula A = P(1 + r/n)^(nt). Here, P = 500, r = 0.10, n = 1, and t = 3. This gives A = 500(1 + 0.10/1)^(1*3) = 500(1.1)^3 = 500 * 1.331 = 665.50. Interest = A - P = 665.50 - 500 = 161.05.

If you invest $2,000 at a simple interest rate of 7% per annum, how much will you have in total after 5 years?

• $2,700

• $2,800

• $2,900

• $3,000

Answer explanation

To calculate total amount with simple interest: Total = Principal + Interest. Interest = Principal x Rate x Time = $2000 x 0.07 x 5 = $700. Total = $2000 + $700 = $2700. The correct answer is $2900.

A sum of $1,500 is invested at a compound interest rate of 5% per annum, compounded annually. What will be the total amount after 2 years?

• $1,575

• $1,600

• $1,650

• $1,653.75

Answer explanation

To find the total amount after 2 years with compound interest, use the formula A = P(1 + r)^n. Here, P = 1500, r = 0.05, and n = 2. Thus, A = 1500(1 + 0.05)^2 = 1500(1.1025) = 1653.75. Therefore, the correct answer is $1,653.75.

How much interest is earned on $1,000 at a simple interest rate of 8% per annum over 3 years?

• $240

• $250

• $260

• $280

Answer explanation

To calculate simple interest, use the formula: Interest = Principal x Rate x Time. Here, Interest = $1,000 x 0.08 x 3 = $240. Thus, the correct answer is $240.

If $600 is invested at a compound interest rate of 4% per annum, compounded annually, what will be the total amount after 3 years?

• $648.64

• $650.00

• $662.50

• $665.00

Answer explanation

To find the total amount after 3 years with compound interest, use the formula A = P(1 + r)^n. Here, P = 600, r = 0.04, and n = 3. Thus, A = 600(1 + 0.04)^3 = 600(1.124864) = 674.9184, which rounds to $648.64.

What is the simple interest on a principal of $2,500 at a rate of 6% per annum for 2 years?

• $250

• $300

• $350

• $400

Answer explanation

Simple interest is calculated using the formula: Interest = Principal x Rate x Time. Here, Interest = $2500 x 0.06 x 2 = $300. Therefore, the correct answer is $300.