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This topic covers compound interest and depreciation, applying a percentage multiplier repeatedly over several years using the power of the multiplier. It's examined right across GCSE and iGCSE Maths. Work through it free on eClassroom, with clear worked examples and instantly-marked questions that build your confidence for the exam.
How you do it
Multiply by the same decimal multiplier once for every year, which means raising it to the power of the number of years. Compound interest is the original amount times the multiplier to the power n. Subtract the original at the end if the question wants the interest rather than the total.
Before you start
Before starting, revisit percentages and index laws. It sets up growth and decay modelling.
What you learn
Compound interest pays interest on your interest, so savings snowball. The same idea in reverse — depreciation — makes things like cars lose value year after year. With compound interest, each year’s interest is added on, so the next year earns interest on a larger amount. Depreciation is compound decay — a value falls by the same percentage each year, so the multiplier is less than 1. Simple interest pays the same amount every year (a fixed percentage of the original). The course works through compound interest, depreciation (compound decay) and simple versus compound interest. Every section has instant-feedback practice questions matched to Edexcel iGCSE 4MA1 and the other major GCSE boards, and the course finishes with full exam-style questions you mark yourself.
Related Topics
Compound Interest & Decay is part of the Number strand of our free GCSE maths courses, studied in Foundation tier. You work through 3 concepts and 2 worked examples, testing yourself at 3 points. Nearby topics in the same strand are Error Intervals, FDP Equivalence, Four Operations and Fractional & Negative Indices. For unlimited practice, the Number revision engine builds new questions on demand and records your accuracy.
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