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0580/42 May/Jun 2025, Question 17: Compound Interest

Cambridge IGCSE Mathematics 0580 · Paper 42 (Extended) · Calculator · 10 marks

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The question, in short

Three money problems: simple interest on $400 at 2.3% for 5 years; find x from Virat's spending with 10% increases and $33.80 left; compound interest growth from $500 to $700.13 over 17 years, then value at 20 years.

Summarised in our own words. Use the official paper for the exact wording and any diagrams.

Part (a) · 3 marks

Calculate total amount from $400 simple interest at 2.3% per year over 5 years.

  1. 1Interest = 400 × 2.3/100 × 5 = 46
  2. 2Total = 400 + 46 = $446

Answer446

Part (b) · 3 marks

Find x given $100, February spend x, March and April each 10% more, $33.80 remaining.

  1. 1March = 1.1x, April = 1.1² x = 1.21x
  2. 2x + 1.1x + 1.21x = 100 − 33.80
  3. 33.31x = 66.2
  4. 4x = 66.2 ÷ 3.31 = 20

Answer20

Part (c) · 4 marks

Given $500 grows to $700.13 in 17 years compound interest, find value after 20 years.

  1. 1500 × (1 + r/100)¹⁷ = 700.13
  2. 21 + r/100 = ¹⁷√(700.13/500) = ¹⁷√1.40026 = 1.0200…
  3. 3Value after 20 years = 500 × 1.0200…²⁰
  4. 4= 742.98…

Answer742.97 to 742.99

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