Calculating Interest

Worksheet Answers

This is a selection of past exam questions from Edexcel, targeted at the middle ability range. You can use the sequence as it stands or select individual questions to suit your needs.

Below is the mark scheme for each question, which may help you to see how marks are allocated and what the examiner is especially looking for. The mark schemes use the following abbreviations:

Question 1

484 + 20.81 (= 504.81)

504.81 + 21.71

OR

484 x 1.043 = 504.81
"504.81" x 1.043 = 526.52

OR

484 x 1.043² = 526.52
Accept £526.51 or £526.52

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Question 2

1 January 1997 £8500
1 January 1998 £7650
1 January 1999 £6885

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Question 3

(a)
0.06 x 500 oe (= 30)
0.06 x (500 + "30") (= 31.8)
= £61.80

OR

500 x (1.06)² oe

(b)
(1.07)³ = 1.23

Notes:
(a)
M1 for 0.06 x 500 oe (= 30)
M1 for 0.06 x (500 + "30") (= 31.8)
A1 for £61.80 (accept 61.8)

OR

M2 for 500 x (1.06)² oe
(M1 for 500 x 1.06) oe
A1 for 61.80 ft (accept 61.8)

(b)
B1 cao for 1.23 or better
Accept (1.07)³ seen

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Question 4

(a)
i) 450 x 0.8 or
450 – (0.2 x 450) (oe) = £360
ii) 0.8 x "360" or 288 seen
0.8 x "288" (oe) = £230.40

(b)

Notes:
(a)
i) M1
A1 cao
ii) M1
M1 (dep on previous M1)
A1 cao (accept 230.4)

(b)
M1
A1 cao

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Question 5

(a)
(7 x 250) + (20 x 750) + (11 x 1250) + (9 x 1750) + (3 x 2250)
£53 000 ÷ 50
= £1060

(b)
£1200 x 0.85 = £1020
£1020 x 0.85 = £867
£867 x 0.85
= £736.95

Notes:
(a)
M1 x f (including end points consistently)
M1 (dep) consistent midpoints used
M1 ÷ 50 (dep on first M1)
A1 cao

(b)
M1 for x 0.85 (oe)
A1 cao for £1020: 1st year
A1 cao for £867: 2nd year
A1 cao for £736.95: 3rd year
SC: for £1825.05 give B2

OR

M1 for 1200 x 0.85ⁿ
A1 for n = 3
A1 0.614125 (implied)
A1 cao
NB: isw ignore workings / answer for further years