💷 Percentages and compound interest

Answer key

1. (a) £3244.80 — A 4% increase each year means the value becomes 100% + 4% = 104% of the previous year's value, and 104% = 1.04, so the multiplier is 1.04. Multiply by 1.04 for each year: £3000 × 1.04 × 1.04 = £3244.80. (£3240.00 comes from using simple interest instead of compound interest: £3000 + 2 × (£3000 × 0.04) = £3240.00. £3120.00 is the value after only 1 year, £3000 × 1.04, forgetting to apply the second year's growth. £244.80 is the interest earned, £3244.80 − £3000, not the total value of the investment.)
2. (d) 25% — Method: percentage decrease = decrease ÷ original amount × 100. Working: the reduction is £60 − £45 = £15, and 15 ÷ 60 = 0.25, so 0.25 × 100 = 25%. Answer: 25%. The distractors: 15% comes from quoting the £15 reduction as though pounds and per cent were the same thing; 33% comes from dividing the £15 by the new price £45 instead of by the original £60, which gives 33% to the nearest per cent; 75% is the new price written as a percentage of the old one, which is what is still paid rather than what has been taken off.
3. (d) £33.00 — The profit is 3/8 of £24 = (£24 ÷ 8) × 3 = £3 × 3 = £9.00. Selling price = £24 + £9.00 = £33.00. A candidate who gives the profit instead of the selling price gets £9.00. A candidate who subtracts the profit instead of adding it gets £24 − £9 = £15.00. A candidate who works out one eighth of £24 and adds that on, forgetting to multiply by the numerator 3, gets £24 + £3 = £27.00.
4. (d) 30 — Method: 50% is one half, so 50% of a quantity is the quantity divided by 2. Working: 60 ÷ 2 = 30. Answer: 30. The distractors: 120 comes from multiplying by 2 instead of dividing; 3000 comes from multiplying by 50 without dividing by 100; 6 comes from finding 10% instead of 50%.
5. (c) 150 m — Method: a fraction acts as an operator, so finding 3/7 of a length means dividing by the denominator and multiplying by the numerator. Working: 350 ÷ 7 = 50, so one seventh of the route is 50 m, and three sevenths is 50 × 3 = 150 m. Answer: 150 m. The distractors: 50 m comes from finding one seventh and stopping there instead of multiplying by 3; 1050 m comes from multiplying by the numerator without dividing by the denominator, giving 350 × 3 = 1050; 200 m comes from working out the stretch of the route the footpath does not run alongside, which is 4/7 of 350 m, instead of the stretch it does.
6. (d) 75% — Method: change a fraction to a percentage by dividing the numerator by the denominator and multiplying by 100. Working: 3 ÷ 4 = 0.75, and 0.75 × 100 = 75. Answer: 75%. The distractors: 34% comes from reading the digits 3 and 4 straight off as a percentage; 0.75% comes from dividing but forgetting to multiply by 100; 133% comes from inverting the fraction and working out 4 ÷ 3 instead.
7. (a) 1/4 — The empty part of the tank is 80 − 60 = 20 litres. As a fraction of the full capacity, this is 20/80, which simplifies to 1/4. Finding the fraction of the tank that is FULL instead of empty, 60/80, simplifies to 3/4 — the wrong quantity for the question asked. Writing the empty amount over the amount remaining instead of over the full capacity, 20/60, simplifies to 1/3. Comparing the empty amount to 100 instead of to the tank's actual capacity of 80, 20/100, gives 1/5.
8. (c) £136 — 5% interest each year means the value becomes 100% + 5% = 105% of the previous year's value, and 105% = 1.05, so the multiplier is 1.05. Account A: £3200 × 1.05 × 1.05 = £3528. Account B (simple interest): £3200 + 2 × (£3200 × 0.03) = £3392. The difference is £3528 − £3392 = £136. (£128 comes from working out Account A with simple interest too, instead of compound: £3200 + 2 × (£3200 × 0.05) = £3520, then £3520 − £3392 = £128. £3528 is the value of Account A on its own, not the difference between the two accounts. £3392 is the value of Account B on its own, not the difference.)
9. (b) 80 — Method: the difference between 40% and 25% of the number is 15% of the number, and that difference is 12. Working: 15% of the number is 12, so 1% of the number is 12 ÷ 15 = 0.8, and the number is 0.8 × 100 = 80. Check: 40% of 80 is 32, 25% of 80 is 20, and 32 − 20 = 12. Answer: 80. The distractors: 30 comes from solving 40% of the number = 12; 48 comes from solving 25% of the number = 12; 15 is the percentage difference written as the answer.
10. (b) £52,000 — Method: convert 130% to a decimal multiplier and multiply it by last year's profit. Working: 130% = 1.3, so this year's profit is £40,000 × 1.3 = £52,000. Answer: £52,000. £12,000 comes from using only the extra 30% (130% − 100%) and forgetting to include the original 100%, £40,000 × 0.3 = £12,000. £40,130 comes from simply adding 130 onto £40,000, treating the percentage as an amount of money rather than a multiplier. £5,200 comes from misreading 130% as 13%, giving £40,000 × 0.13 = £5,200.
11. (b) 30 — Method: 12% of an amount is 12/100 of it, so find 1% by dividing by 100 and then multiply by 12. Working: 1% of 250 is 250 ÷ 100 = 2.5, and 12% is 2.5 × 12 = 30. Answer: 30 seats. The distractors: 3 comes from writing 12% as 0.012 instead of 0.12, giving 0.012 × 250 = 3; 25 comes from finding 10% of the seats and stopping there; 24 comes from counting 12 seats for each whole hundred, 12 + 12 = 24, and ignoring the remaining 50 seats.
12. (a) £85.47 — Value after 2 years: £1200 × 1.035 × 1.035 = £1285.47 (nearest penny). Interest earned = £1285.47 − £1200 = £85.47. £1285.47 is the total value of the account, not the interest earned on top of the original £1200. £84.00 comes from using simple interest instead of compound interest: £1200 × 0.035 × 2 = £84.00. £42.00 comes from working out only the first year's interest and stopping there: £1200 × 0.035 = £42.00.
13. (b) 4% — Method: find the total interest earned, share it equally across the number of years to find one year's interest, then write it as a percentage of the amount invested. Working: total interest = £840 − £750 = £90, so one year's interest is £90 ÷ 3 = £30, and £30 as a percentage of £750 is (£30 ÷ £750) × 100 = 4%. Answer: 4%. 12% comes from treating the total interest of £90 as if it were earned in a single year, (£90 ÷ £750) × 100 = 12%, forgetting to divide by 3 years. 0.04% comes from finding the correct decimal, £30 ÷ £750 = 0.04, but forgetting to multiply by 100 to convert it into a percentage. 112% comes from writing the final amount, £840, as a percentage of the amount invested, £750, without first subtracting the £750 to find the interest alone.
14. (c) a decrease of 25% — Method: use multipliers. An increase of 50% is × 1.5 and a decrease of 50% is × 0.5. Working: 1.5 × 0.5 = 0.75, so the final price is 75% of the original. Answer: a decrease of 25%. The distractors: no change comes from assuming +50% and −50% cancel; a decrease of 50% comes from applying only the second change; an increase of 25% has the direction wrong.
15. (b) £72 — One fifth of £60 = £12. New price = £60 + £12 = £72. A candidate who gives the increase instead of the new price gets £12. A candidate who subtracts the increase instead of adding it gets £60 − £12 = £48. A candidate who uses 1/4 instead of 1/5 gets £60 + £15 = £75.
16. (b) 10 — First find 1/4 of 80, which is 20, then find 1/2 of that: 20 ÷ 2 = 10. Adding the two fractions together instead of applying them one after the other, 1/2 + 1/4 = 3/4, and finding 3/4 of 80 gives 60. Finding 1/4 of 80 = 20 correctly but stopping before applying the second fraction leaves 20 as the final answer. Finding 1/2 of 80 = 40 first but forgetting to then find 1/4 of that leaves 40 as the final answer.
17. (c) £478.40 — Method: apply the percentage increase, then apply the percentage decrease to the new price. Working: after the increase, the laptop costs £520 × 1.15. Multiplying this result by 0.80 gives the final price, £478.40. Answer: £478.40. £494 comes from combining the two percentages into a single net change (15% − 20% = −5%) and applying it directly, £520 × 0.95 = £494, instead of applying the two changes one after the other. £416 comes from applying only the 20% decrease to the original price, £520 × 0.80 = £416, forgetting the increase entirely. £598 comes from applying only the 15% increase and stopping there, forgetting to apply the decrease at all.
18. (c) 150% — Percentage = (180,000 ÷ 120,000) × 100 = 150%.
19. (c) 21% — Method: an increase of 10% is a multiplier of 1.1, and two successive increases are found by multiplying the multipliers. Working: 1.1 × 1.1 = 1.21, so the rent is 121% of the original, which is an increase of 21%. Answer: 21%. The distractors: 20% comes from adding the two percentages, which ignores that the second 10% is taken of a larger amount; 121% is the multiplier written as the change rather than the change itself; 11% comes from slipping in the multiplication and getting 1.11 instead of 1.21.
20. (d) 2748 — A 7% increase each year means the value becomes 100% + 7% = 107% of the previous year's value, and 107% = 1.07, so the multiplier is 1.07. Multiply by 1.07 for each of the 2 years: 2400 × 1.07 × 1.07 = 2747.76, which rounds to 2748. (2736 comes from using simple growth instead of compound: 2400 + 2 × (2400 × 0.07) = 2736. 2568 is the population after only 1 year, 2400 × 1.07, forgetting the second year's growth. 2747 comes from rounding 2747.76 down instead of up to the nearest whole number.)
21. (c) £2743.60 — Each year the balance is multiplied by 1.03. After the first year: 4000 × 1.03 = 4120. After the second year: 4120 × 1.03 = 4243.60, so that is what Leah takes out. She then spends £1500 of it, which leaves 4243.60 − 1500 = 2743.60. She has £2743.60 left.
22. (d) 19% — Method: write each decrease as a multiplier, multiply the multipliers, then compare the result with 100%. Working: a 10% decrease is a multiplier of 0.9, so the two reductions together give 0.9 × 0.9 = 0.81; the final price is 81% of the original, so the price has fallen by 100% − 81% = 19%. Answer: an overall decrease of 19%. The distractors: 20% comes from adding the two reductions, 10% + 10%, which charges the second 10% against the original price instead of against the already reduced price; 21% comes from using the increase multiplier by mistake, since 1.1 × 1.1 = 1.21, and reading that 21% as a decrease; 81% is the percentage of the original price still being paid, not the percentage taken off.