Growth and Decay Problems Growth and Decay Problems

Solve the following interest problems. All interest rates are compound Solve the following interest problems. All interest rates are compound
interest. interest.
1. £1000 is invested at an interest rate of 2% per annum. Find the 1. £1000 is invested at an interest rate of 2% per annum. Find the
value after 3 years. value after 3 years.

 

2. £5200 is invested at an interest rate of 3.5% per annum. Find the 2. £5200 is invested at an interest rate of 3.5% per annum. Find the
value after 5 years. value after 5 years.

 

3. The value of a mobile home depreciates by 5% per annum. If the 3. The value of a mobile home depreciates by 5% per annum. If the
mobile home was purchased for £50 000, what is its value after 10 mobile home was purchased for £50 000, what is its value after 10
years? years?

 

4. A house was purchased for £250 000 seven years ago. Its value 4. A house was purchased for £250 000 seven years ago. Its value
increased by 8% in the first year then by 11.5% for the next six increased by 8% in the first year then by 11.5% for the next six
years. By how much has it increased in value? years. By how much has it increased in value?

 

 

5. A car was purchased for £24 000 three years ago. Its value 5. A car was purchased for £24 000 three years ago. Its value
depreciated by 20% in the first year then by 10% for the next two depreciated by 20% in the first year then by 10% for the next two
years. What is its current value? years. What is its current value?

 

Place the answers in descending order. Place the answers in descending order.

 

Maths Revision Test Bites Foundation Maths Revision Test Bites Foundation
Growth and Decay Problems Answers
Solve the following interest problems. All interest rates are compound
interest.
1. £1000 is invested at an interest rate of 2% per annum. Find the
value after 3 years.
3
1000 × 1.02 = £1061.21 (2d.p.)

2. £5200 is invested at an interest rate of 3.5% per annum. Find the

value after 5 years.
5
5200 × 1.035 = £6175.97 (2d.p.)

3. The value of a mobile home depreciates by 5% per annum. If the

mobile home was purchased for £50 000, what is its value after 10
years?
10
50 000 × 0.95 = £29 936.85 (2d.p.)

4. A house was purchased for £250 000 seven years ago. Its value
increased by 8% in the first year then by 11.5% for the next six
years. By how much has it increased in value?
6
250 000 × 1.08 × 1.115 = £518 815.53 (2d.p.)

518 8125.53 – 250 000 = £268 815.53 (2d.p.)

5. A car was purchased for £24 000 three years ago. Its value
depreciated by 20% in the first year then by 10% for the next two
years. What is its current value?
2
24 000 × 0.8 × 0.9 = £15 552

Place the answers in descending order.

268 815.53, 29 936.85, 15 552, 6175.97, 1061.21

Maths Revision Test Bites Foundation