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4024/23 May/Jun 2025, Question 9: Simple Interest

Cambridge O Level Mathematics 4024 · Paper 23 (Calculator) · Calculator · 6 marks

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The question, in short

Compare two savings investments: one with simple interest and one with compound interest, calculating the final value and the total interest earned.

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

Part (a) · 3 marks

Calculate the value of $480 invested at 3.6% simple interest per year after 5 years.

  1. 1Interest = 480 × 3.6/100 × 5 = $86.40
  2. 2Value = 480 + 86.40 = $566.40

Answer566.40

Part (b) · 3 marks

Calculate the total interest on $600 at 2.7% compound interest per year after 4 years.

  1. 1Value = 600 × (1 + 2.7/100)⁴
  2. 2= 600 × 1.027⁴ = 667.47…
  3. 3Interest = 667.47… − 600 = $67.47

Answer67.47

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