Year 10 - Maths
Calculating compound interest rates
Percentages
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This pupil-friendly study guide includes a unit summary, clear notes, common mistakes, and quick questions with answers.
Unit Summary
In this unit pupils will learn how to perform simple and compound interest calculations using percentages.
Lesson Summary
You will learn to calculate compound interest rates given start and end values.
Key Notes
- If the compound interest rate is fixed but unknown, you can calculate it.
- To calculate it you need to know the start and end values, as well as the period of time.
- The interest rate is interpreted based on the period of time.
- The period of time could be per day/week/month/year etc.
Vocabulary To Learn
- Rate of interest: The rate of interest is the percentage by which an amount increases.
- Compound interest: Compound interest is the interest calculated on the original amount and the interest accumulated over the previous period.
- Exponential form: When a number is multiplied by itself multiple times, it can be written more simply in exponential form.
Common Mistakes To Avoid
- When using multipliers, pupils can mistake a decimal for the percentage decrease. e.g. 0.52 is a 52% decrease, rather than recognising a 48% decrease.
3 Quick Questions (With Answers)
1. Solve this in steps: explain the method from this lesson and why each step matters.
If the compound interest rate is fixed but unknown, you can calculate it. To calculate it you need to know the start and end values, as well as the period of time.
2. Use this key word in a maths sentence and explain it clearly. 'Rate of interest'
The rate of interest is the percentage by which an amount increases. Use this word when showing your method, then check your final answer is reasonable.
3. Spot and fix this common maths mistake.
Mistake: When using multipliers, pupils can mistake a decimal for the percentage decrease. e.g. 0.52 is a 52% decrease, rather than recognising a 48% decrease. Correction: Reminding students that a decimal multiplier greater than 1 means an increase, and a decimal multiplier less than 1 means a decrease. The latter requires a subtraction from 1 or 100%.
More Lessons In This Unit
- Advanced problem solving with percentages Study Guide
- Changing compound interest rates Study Guide
- Checking and securing understanding of finding a percentage Study Guide
- Checking and securing understanding of percentage decrease Study Guide
- Checking and securing understanding of percentage increase Study Guide
- Compound interest calculations Study Guide
- Compound interest calculations with technology Study Guide
- Percentage profit and loss Study Guide
- Problem solving with percentages Study Guide
- Simple and compound interest Study Guide
- Simple interest calculations Study Guide
- Simple interest calculations with technology Study Guide
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