💷 Percentages and compound interest

Answer key

1. (a) 200 g — One quarter of 160 g is 40 g. Increasing the amount means adding this on: 160 + 40 = 200 g. Finding the increase, 1/4 of 160 = 40 g, but stopping there without adding it to the original amount leaves just 40 g. Using 4/5 instead of 5/4 as the scaling fraction, 160 × 4/5 = 128 g, actually decreases the amount rather than increasing it. Increasing by a half instead of a quarter, 160 + 80 = 240 g, uses the wrong fraction of 160.
2. (a) 2978 — A rise of 6% is a multiplier of 1.06, applied once for each year. After year 1: 2500 × 1.06 = 2650. After year 2: 2650 × 1.06 = 2809. After year 3: 2809 × 1.06 = 2977.54, which is 2978 to the nearest whole number. Multiplying by 1.18 in one go would be wrong, because the second and third years grow from larger numbers than the first.
3. (d) 3200 × 0.88³ — A fall of 12% leaves 88% of the value, because 100 − 12 = 88, and 88% written as a decimal multiplier is 0.88. Decay repeats that multiplier once for each year, so over 3 years it is applied three times: 0.88 × 0.88 × 0.88, which is written 0.88³. The calculation is therefore 3200 × 0.88³. Adding the percentages to make a single fall of 36% would be wrong, because each year's fall is taken from a smaller value than the year before.
4. (a) £18 — Method: the percentage acts as an operator on the bill, and 15% can be built from 10% and 5%, where 5% is half of 10%. Working: 10% of £120 is £120 ÷ 10 = £12, and 5% is half of that, £6, so the charge is £12 + £6 = £18. Answer: £18. The distractors: £8 comes from reading 15% as one fifteenth and working out £120 ÷ 15 = £8; £12 comes from finding 10% of the bill and stopping there; £138 comes from finding the charge correctly and then giving the new total, £120 + £18, rather than the charge the question asks for.
5. (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.
6. (d) £7060 — A 6% decrease each year means the value becomes 100% − 6% = 94% of the previous year's value, and 94% = 0.94, so the multiplier is 0.94. Apply it once for each of the 3 years: £8500 × 0.94 = £7990 after 1 year, £7990 × 0.94 = £7510.60 after 2 years, £7510.60 × 0.94 = £7059.96 after 3 years, which rounds to £7060 to the nearest pound. (£6970 comes from using simple depreciation instead of compound, taking 6% of the original £8500 three times: £8500 − 3 × £510 = £6970. £7990 is the value after only 1 year, forgetting the remaining 2 years. £7511 is the value after only 2 years, £8500 × 0.94² = £7510.60, forgetting the third year.)
7. (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.
8. (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.
9. (d) £8262 — A fall of 15% is a multiplier of 0.85 and a fall of 10% is a multiplier of 0.9, and each multiplier acts on the value at the start of its own year. After year 1: 12000 × 0.85 = 10200. After year 2: 10200 × 0.9 = 9180. After year 3: 9180 × 0.9 = 8262. The value 3 years after the car was bought is £8262. Adding the percentages to make a single fall of 35% would be wrong, because the later falls are taken from smaller values.
10. (a) 4 — Method: a unit fraction acts as an operator, so finding 1/5 of an amount means dividing that amount by 5. Working: 20 ÷ 5 = 4, so Noah gives away 4 stickers. Answer: 4 stickers. The distractors: 100 comes from multiplying by the denominator instead of dividing by it, giving 20 × 5 = 100; 16 comes from working out how many stickers Noah keeps, the other four fifths of the pack, instead of how many he gives away; 5 comes from writing down the denominator, which is the number of equal groups the pack is split into rather than the size of one group.
11. (d) £20 — 1% of £250 = £2.50, so 8% = 8 × £2.50 = £20. A candidate who misplaces the decimal point and finds 0.8% instead gets £2. A candidate who confuses 8% with 80% gets £200. A candidate who rounds 8% up to the nearby 10% gets £25.
12. (c) 150% — Percentage = (180,000 ÷ 120,000) × 100 = 150%.
13. (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.
14. (b) 7980 — After the first year: 8000 × 0.95 = 7600. After the second year: 7600 × 1.05 = 7980. 8000 comes from assuming a 5% decrease followed by a 5% increase returns exactly to the starting number — it does not, because the increase acts on the smaller, already-reduced number. 8400 comes from applying only the second year's 5% increase to the original number: 8000 × 1.05 = 8400. 7600 comes from applying only the first year's 5% decrease and stopping there, without applying the second year's increase.
15. (a) £177.60 — Total raised = 240 × £1.85 = £444.00. The hospital receives 40% of this: £444.00 × 0.4 = £177.60. A candidate who works out the remaining 60% instead of the 40% given away gets £266.40. A candidate who forgets to find the percentage and gives the full total gets £444.00. A candidate who halves 40% by mistake and uses 20% gets £88.80.
16. (b) £60 — £48 represents 100% − 20% = 80% of the original price. 1% = £48 ÷ 80 = £0.60, so 100% = £0.60 × 100 = £60.
17. (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.
18. (c) £338.69 — To increase by 12% each year, multiply by 1.12 twice. £270 × 1.12 × 1.12 = £338.688, which rounds to £338.69 (nearest penny, since the third decimal place is 8). £334.80 comes from treating the two 12% increases as a single flat 24% increase applied once instead of compounding: £270 × 1.24 = £334.80. £302.40 comes from applying the 12% increase only once, for 1 year instead of 2: £270 × 1.12 = £302.40. £338.68 comes from rounding £338.688 down to the nearest penny instead of up.
19. (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.
20. (d) 25% — Method: to convert a decimal to a percentage, multiply by 100. Working: 0.25 × 100 = 25. Answer: 25%. The distractors: 0.25% comes from writing a percent sign after the decimal without multiplying; 2.5% comes from multiplying by 10 instead of 100; 250% comes from multiplying by 1000.
21. (d) 36 — To find 3/8 of 96, divide by the denominator and multiply by the numerator: 96 ÷ 8 = 12, and 12 × 3 = 36. Dividing 96 by the numerator instead of the denominator, 96 ÷ 3 = 32, uses the wrong part of the fraction. Using 3/4 instead of 3/8, perhaps misreading the denominator, gives 96 × 3/4 = 72. Finding 96 ÷ 8 = 12 correctly but forgetting to multiply by the numerator 3 leaves just 12 as the final answer.
22. (d) £6705 — After the first year: £6400 × 1.08 = £6912. After the second year: £6912 × 0.97 = £6704.64, which rounds to £6705 (nearest pound). £6720 comes from treating the +8% and −3% changes as a single net +5% change applied to the original amount instead of applying each change in turn: £6400 × 1.05 = £6720. £6912 comes from applying only the first year's growth and stopping there, without applying the second year's fall. £7104 comes from adding the two percentages together as +11% and applying that to the original amount instead of applying each change to the correct starting amount in turn: £6400 × 1.11 = £7104.