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0580/43 Oct/Nov 2021, Question 5: Compound Interest

Cambridge IGCSE Mathematics 0580 · Paper 43 (Extended) · Calculator · 8 marks

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The question, in short

Compare simple and compound interest on $500 at 3% for 7 years, then work backwards from a car worth $6269.40 after 10% yearly depreciation to find its value 3 years earlier.

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Part (ai) · 2 marks

Calculate the total simple interest earned on $500 at 3% per year over 7 years.

  1. 1Interest per year = 500 × 3/100 = 15
  2. 2Total interest = 15 × 7 = $105

Answer105

Part (aii) · 3 marks

Calculate the total compound interest earned on $500 at 3% per year over 7 years.

  1. 1Value = 500 × 1.03⁷
  2. 2= 614.936...
  3. 3Interest = 614.936... − 500 = 114.936...
  4. 4≈ $115

Answer115 or 114.9...

Part (b) · 3 marks

Given a car now worth $6269.40 depreciating 10% yearly, calculate its value 3 years ago.

  1. 1Let the value 3 years ago be C
  2. 2C × 0.9³ = 6269.40
  3. 3C = 6269.40 ÷ 0.729
  4. 4C = $8600

Answer8600

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Also searched as: 0580/43/O/N/21 · 0580_w21_qp_43 · 0580 w21 43 · question 5.
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