Calculations can be carried out using percentages of shapes and quantities. We can calculate percentage increase and decrease, as well as express a quantity as a percentage of another quantity.
Part ofApplications of MathsNumeracy skills
If money is left in a bank or building society for more than one year, then the amount of interest earned causes the balance to increase.
Remember - this is simple interest which is different from compound interest.
Here is an example of how to calculate simple interest over multiple years.
Darren leaves \(\pounds350\) in his building society account for 3 years.
The account paid interest at a rate of \(8\%\) per annum.
How much does he have in his account after 3 years?
Interest for one year \(= 8\%\,of\,\pounds350\)
\(= \frac{8}{{100}} \times 350\)
\(= 0.08 \times 350\)
\(= \pounds28\)
Interest for three years \(= 3 \times \pounds28 = \pounds84\)
New balance \(= \pounds350 + \pounds84 = \pounds434\)
After three years Darren will have \(\pounds434\) in his account.
Morag earns \(4.5\%\) interest per year on the money she has saved in her bank account.
She starts off with \(\pounds200\). How much is in her account after 5 years?
Interest for one year \(= 4.5\%\times\pounds200\)
\(= \frac{{4.5}}{{100}} \times 200\)
\(= 0.045 \times 200\)
\(= \pounds9\)
Interest for five years \(= 5 \times \pounds9 = \pounds45\)
New balance \(= \pounds200 + \pounds45 = \pounds245\)
After 5 years Morag will have \(\pounds245\).
