💷 Percentages and compound interest

Answer key

1. (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.
2. (d) 60 — Method: a percentage acts as an operator, so finding 20% of an amount means multiplying it by 20/100, which cancels to 1/5. Working: 20% = 20/100 = 1/5, and 300 ÷ 5 = 60. Answer: 60 seats. The distractors: 15 comes from reading 20% as one twentieth and working out 300 ÷ 20 = 15; 30 comes from finding 10% of 300 and stopping there instead of doubling it; 6 comes from converting 20% to 0.02 rather than 0.2, giving 0.02 × 300 = 6.
3. (a) 45% — Method: percentage increase = increase ÷ original amount × 100. Working: the increase is £116 − £80 = £36, and 36 ÷ 80 = 0.45, so 0.45 × 100 = 45%. Answer: 45%. The distractors: 36% comes from quoting the £36 increase as though pounds and per cent were the same thing; 31% comes from dividing the £36 increase by the new price £116 instead of by the original £80, which gives 31% to the nearest per cent; 145% is the new price written as a percentage of the original price, which is the whole of the new price rather than the increase.
4. (c) £672 — Simple interest per year = 3% of £600 = £18. Over 4 years the interest is 18 × 4 = £72. Total in the account = £600 + £72 = £672. A student who gives just the interest, without adding it to the principal, writes £72. A student who adds only one year's interest instead of four gets £600 + £18 = £618. A student who wrongly compounds the interest each year gets 600 × 1.03⁴ = £675.31.
5. (c) 150 — Since 90 students represent 3 of the 5 equal parts, one part is 90 ÷ 3 = 30, and the whole year group is five parts: 30 × 5 = 150. Applying the fraction forwards to 90 instead of reversing it, 90 × 3/5 = 54, treats the given number as the whole rather than as three fifths of it. Finding one part correctly as 30 but forgetting to scale up to the whole year group leaves 30 as the final answer. Treating 90 as the whole year group and adding on 2/5 of 90 for the students who do not walk, 90 + (90 × 2/5) = 126, applies the missing fraction to the wrong base amount.
6. (c) £840 — Method: find the total amount raised using the reverse percentage, then subtract the entry fees to find the donations. Working: £1,260 is 60% of the total, so the total is £1,260 ÷ 0.6, and subtracting the entry fees from this total leaves £840 raised through donations. Answer: £840. £2,100 comes from correctly finding the total amount raised but then forgetting to subtract the entry fees, giving the total instead of the donations alone. £504 comes from working out 40% of the entry fees themselves, £1,260 × 0.4 = £504, instead of first finding the total amount raised. £1,890 comes from treating £1,260 as 40% of the total instead of 60%, dividing by 0.4 to get a total of £3,150, and then subtracting the entry fees from that incorrect total.
7. (a) 3/8, 41%, 0.43 — Method: convert every value to a decimal so they can be compared on the same scale, then order them. Working: 3/8 = 0.375, 41% = 0.41, and 0.43 stays as 0.43, so from smallest to largest the decimals are 0.375, 0.41, 0.43, giving the order 3/8, 41%, 0.43. Answer: 3/8, 41%, 0.43. The order 3/8, 0.43, 41% comes from comparing 0.43 and 41% as raw digits (43 versus 41) without converting 41% into the decimal 0.41 first, wrongly placing 0.43 before 41%. The order 0.43, 41%, 3/8 comes from placing the values in completely reversed order, from largest to smallest instead of smallest to largest. The order 41%, 0.43, 3/8 comes from ordering the values by their TYPE (percentage, then decimal, then fraction) rather than by their actual size.
8. (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.
9. (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%.
10. (b) 63 — 10% of 180 = 18, so 5% = 9. 35% = (3 × 18) + 9 = 54 + 9 = 63. A candidate who uses 25% instead of 35% gets 45. A candidate who doubles 35% to get 70% by mistake gets 126. A candidate who subtracts 35 from 180 instead of finding a percentage gets 145.
11. (b) £2205.00 — With compound interest each year's interest is worked out on the value at the start of that year, so a 5% rise is a multiplier of 1.05 applied once per year. After the first year: 2000 × 1.05 = 2100. After the second year: 2100 × 1.05 = 2205. The question asks for the value of the investment, not for the interest earned, so the answer is £2205.00.
12. (c) £7617.60 — To decrease by 8% each year, multiply by 0.92 (100% − 8%) twice. £9000 × 0.92 × 0.92 = £7617.60. £7560.00 comes from treating the two 8% decreases as a single flat 16% decrease applied once instead of compounding: £9000 × 0.84 = £7560.00. £8280.00 comes from applying the 8% decrease only once, for 1 year instead of 2: £9000 × 0.92 = £8280.00. £10497.60 comes from multiplying by 1.08 twice, increasing the value instead of decreasing it: £9000 × 1.08 × 1.08 = £10497.60.
13. (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.
14. (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.
15. (b) £45 — Since 2/3 of the amount is £30, one third is £30 ÷ 2 = £15, and the whole amount is three thirds: £15 × 3 = £45. Applying the fraction forwards to £30 instead of reversing it, £30 × 2/3 = £20, treats the given amount as the whole rather than as two thirds of it. Finding one third correctly as £15 but forgetting to multiply by 3 to get the whole amount leaves £15 as the final answer. Reading £30 as one third of the amount rather than as two thirds, and so multiplying straight by 3, gives £30 × 3 = £90.
16. (c) 20% — Method: percentage increase = (increase ÷ original) × 100. Working: the increase is 54 − 45 = 9, and 9 ÷ 45 = 0.2, so the percentage increase is 0.2 × 100 = 20. Answer: 20%. The distractors: 9% comes from writing the actual increase as a percentage; 16.7% comes from dividing by the new value 54 instead of the original 45; 120% is the multiplier 1.2 written as a change rather than the change itself.
17. (d) £5.40 — Method: work out the reduced price at each shop separately, then subtract the smaller from the larger. Working: Shop A's reduced price is £45 × 0.8 = £36, and Shop B's reduced price is £34 × 0.9 = £30.60, so the difference is £36 − £30.60 = £5.40. Answer: £5.40. £11.00 comes from comparing the two ORIGINAL prices, £45 − £34, without applying either shop's reduction at all. £1.60 comes from finding Shop A's reduced price correctly, £36, but then subtracting Shop B's original (unreduced) price of £34 instead of its reduced price. £66.60 comes from adding the two reduced prices together, £36 + £30.60, instead of subtracting them.
18. (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.
19. (a) 35 — Method: 25% is 25/100, which cancels to 1/4, so finding 25% of an amount means dividing it by 4. Working: 25% = 25/100 = 1/4, and 140 ÷ 4 = 35. Answer: 35 pens. The distractors: 70 comes from halving instead of quartering, confusing 25% with 50%; 105 comes from working out the pens that are not red, which is 75% of 140, instead of the pens that are; 25 comes from ignoring the percent sign and reading the 25% as a count of 25 pens.
20. (c) £70 — Method: 20% of an amount is 20/100 of it; a reliable route is to find 10% by dividing by 10 and then double it. Working: 10% of £350 is £350 ÷ 10 = £35, and 20% is twice as much, £35 × 2 = £70. Answer: £70. The distractors: £35 comes from finding 10% and stopping there; £17.50 comes from reading 20% as one twentieth and working out £350 ÷ 20 = £17.50; £280 comes from taking 20% off the money raised rather than finding 20% of it, giving £350 ÷ 5 = £70 and then £350 − £70 = £280.
21. (b) 3.5 — Method: work out each percentage of its number separately, then subtract the smaller result from the larger one. Working: 45% of 70 = 31.5, and 35% of 80 = 28, so the difference is 31.5 − 28 = 3.5. Answer: 3.5. 11.5 comes from pairing the percentages with the wrong numbers, working out 35% of 70 = 24.5 and 45% of 80 = 36, and finding their difference. 59.5 comes from adding the two correct results, 31.5 + 28, instead of subtracting them. 10 comes from simply subtracting the two percentages themselves, 45 − 35, without applying them to the numbers at all.
22. (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.