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Compound interest & depreciation practice questions with answers

Foundation and Higher · Grade 4 · Calculator

A second set of compound interest & depreciation questions for GCSE Maths. They are different from the ones on the topic page, so work through both. Try each question, then open the answer to check your working.

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Question 1 Easy

An item worth £500 depreciates by 20% a year for 2 years. What is it worth afterwards?

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Answer: 320

  1. Multiply by 4/5 twice.
  2. The value is 320.
  • Method (1): Multiply by 4/5 twice.
  • Accuracy (1): Answer 320

Question 2 Easy

£200 earns 5% simple interest for 3 years. How much simple interest is earned?

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Answer: 30

  1. Simple interest is 5% of the original, three times.
  2. It is not compounded.
  • Method (1): Simple interest is 5% of the original, three times.
  • Accuracy (1): Answer 30

Question 3 Medium

An item worth £500 depreciates by 20% a year for 2 years. How much value is lost?

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Answer: 180

  1. Two 20% falls leave 64% of the value.
  2. The loss is 36% of £500.
  • Method (1): Two 20% falls leave 64% of the value.
  • Accuracy (1): Answer 180

Question 4 Medium

After two 20% depreciations, what percentage of the original value is left?

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Answer: 64

  1. Each fall multiplies by 0.8.
  2. 0.8 × 0.8 = 0.64, which is 64%.
  • Method (1): Each fall multiplies by 0.8.
  • Accuracy (1): Answer 64

Question 5 Hard

£100 grows by 20% compound interest for 2 years. A single 40% rise would give £140. How much more does compound interest give than that single rise?

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Answer: 4

  1. Two 20% rises multiply by 1.44.
  2. Subtract the single 40% result £140.
  • Method (1): Two 20% rises multiply by 1.44.
  • Accuracy (1): Answer 4

Question 6 Hard

£200 decreases by 15% a single time. What is the new amount?

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Answer: 170

  1. A 15% fall uses the multiplier 0.85.
  2. The value is 170.
  • Method (1): A 15% fall uses the multiplier 0.85.
  • Accuracy (1): Answer 170

Exam-style question

A longer question with marks, in the style of a written paper. This is a Yumio practice question, not a past paper question.

Exam-style question 13 marks

An item worth £1000 falls by half and then by 20%. What is it worth?

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Answer: 400

  1. Halve the value first.
  2. Then take 80% of what remains.
  • Method (1): Halve the value first.
  • Method (1): Then take 80% of what remains.
  • Accuracy (1): Answer 400

Quick checks

Short one-step questions. Pick an option before you open the answer.

Check 1

£2100 earns 10% compound interest for 2 years. What is the amount at the end?

  1. £2541
  2. £2520
  3. £2310
Show answer

£2541 The result is £2541.

Check 2

A van worth £2200 depreciates by 10% each year for 2 years. What is it worth at the end?

  1. £1782
  2. £1760
  3. £1980
Show answer

£1782 The result is £1782.

Check 3

£2300 earns 10% compound interest for 2 years. What is the amount at the end?

  1. £2783
  2. £2760
  3. £2530
Show answer

£2783 The result is £2783.

Check 4

A van worth £2400 depreciates by 10% each year for 2 years. What is it worth at the end?

  1. £1944
  2. £1920
  3. £2160
Show answer

£1944 The result is £1944.

Check 5

£2500 earns 10% compound interest for 2 years. What is the amount at the end?

  1. £3025
  2. £3000
  3. £2750
Show answer

£3025 The result is £3025.

Check 6

A van worth £2600 depreciates by 10% each year for 2 years. What is it worth at the end?

  1. £2106
  2. £2080
  3. £2340
Show answer

£2106 The result is £2106.

Check 7

£2700 earns 10% compound interest for 2 years. What is the amount at the end?

  1. £3267
  2. £3240
  3. £2970
Show answer

£3267 The result is £3267.

Check 8

A van worth £2800 depreciates by 10% each year for 2 years. What is it worth at the end?

  1. £2268
  2. £2240
  3. £2520
Show answer

£2268 The result is £2268.

Check 9

£2900 earns 10% compound interest for 2 years. What is the amount at the end?

  1. £3509
  2. £3480
  3. £3190
Show answer

£3509 The result is £3509.

Check 10

A van worth £3000 depreciates by 10% each year for 2 years. What is it worth at the end?

  1. £2430
  2. £2400
  3. £2700
Show answer

£2430 The result is £2430.

Check 11

£3100 earns 10% compound interest for 2 years. What is the amount at the end?

  1. £3751
  2. £3720
  3. £3410
Show answer

£3751 The result is £3751.

Check 12

A van worth £3200 depreciates by 10% each year for 2 years. What is it worth at the end?

  1. £2592
  2. £2560
  3. £2880
Show answer

£2592 The result is £2592.

Check 13

£3300 earns 10% compound interest for 2 years. What is the amount at the end?

  1. £3993
  2. £3960
  3. £3630
Show answer

£3993 The result is £3993.

Check 14

A van worth £3400 depreciates by 10% each year for 2 years. What is it worth at the end?

  1. £2754
  2. £2720
  3. £3060
Show answer

£2754 The result is £2754.

Check 15

£3500 earns 10% compound interest for 2 years. What is the amount at the end?

  1. £4235
  2. £4200
  3. £3850
Show answer

£4235 The result is £4235.

Keep going with Compound interest & depreciation

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