GCSE Maths - Introduction to interest rates

Which best describes an interest rate?

• Money you are paid to take a loan.

• Money you are charged to have a bank account.

• An amount the bank pays you to keep money in a savings account.

• The total amount you have to pay back when you borrow money.

Which are examples of multipliers? (Two correct answers)

• 80%

• 0.8

• 1.025

If you want to find 25% of an amount, which multiplier should you use?

• 1.25

• 0.25

• 0.75

• 25

If you want to increase an amount by 25%, which multiplier should you use?

• 1.25

• 0.25

• 0.75

• 25

If you want to decrease an amount by 25%, which multiplier should you use?

• 1.25

• 0.25

• 0.75

• 25

A bank account has an interest rate of 4% per annum.

You keep the money in the account for one year.

Which multiplier will tell you how much you have in total at the end of the year?

• 1.4

• 0.04

• 1.04

• 0.96

Sami invests £400 for 2 years at 5% per year simple interest.

How can you find how much interest Sami earns in one year?

• 400 x 1.05

• 400 x 5

• 400 x 0.5

• 400 x 0.05

Sami invests £400 for 2 years at 5% per year simple interest.

She earns £400 x 0.05 = £20 interest in one year.

How much interest does she earn in two years?

• £420

• £440

• £20

• £40

Sami invests £400 for 2 years at 5% per year simple interest.

She earns £400 x 0.05 = £20 interest in one year.

How much does she have in total in her account at the end of the two years?

• £420

• £440

• £840

• £40

• 4.5%

• 0.45%

• 45%

• 104.5%