💷 Percentages and compound interest

Answer key

1. (a) £14224 — Value after 2 years: £15000 × 1.04 × 1.04 = £16224. Money left after buying the trailer: £16224 − £2000 = £14224. £14200 comes from treating the two 4% increases as a single flat 8% increase applied once instead of compounding: £15000 × 1.08 = £16200, and £16200 − £2000 = £14200. £13600 comes from applying the 4% increase only once, for 1 year instead of 2: £15000 × 1.04 = £15600, and £15600 − £2000 = £13600. £18224 comes from adding the £2000 instead of subtracting it: £16224 + £2000 = £18224.
2. (a) £6 — 10% of £40 is £4, and 5% of £40 is half of that, £2. Adding these gives 15% of £40 = £4 + £2 = £6. Finding only the 10% part and stopping there gives £4. Finding only the 5% part and stopping there gives £2. Multiplying 40 by 15 without dividing by 100 gives £600, which treats the percentage as if it were a whole number multiplier.
3. (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.
4. (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.
5. (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.
6. (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.
7. (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.
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. (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.)
10. (b) 460 — To increase by 15%, multiply by 1.15 (100% + 15%). 400 × 1.15 = 460. 60 comes from working out only the increase, 400 × 0.15 = 60, and forgetting to add it to the original number. 415 comes from adding 15 directly to 400 instead of 15% of 400. 340 comes from multiplying by 0.85, decreasing instead of increasing: 400 × 0.85 = 340.
11. (c) 200 students — Method: find the percentage who have a brother or a sister, taking care that the students with both are not counted twice, then take that percentage from 100% and apply the result to the 400 students. Working: 25% + 40% = 65%, but the 15% with both has been counted in each of those figures, so 65% − 15% = 50% have a brother or a sister; that leaves 100% − 50% = 50%, and 50% of 400 = 200. Answer: 200 students. The distractors: 260 students is 65% of 400, the number with a brother or a sister when the 15% overlap is counted twice; 140 students comes from taking that same uncorrected 65% away from the 400; 300 students comes from subtracting only the 25% with a brother and ignoring the sisters altogether.
12. (b) £60 — £48 represents 100% − 20% = 80% of the original price. 1% = £48 ÷ 80 = £0.60, so 100% = £0.60 × 100 = £60.
13. (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.
14. (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.
15. (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.
16. (b) 80% — Percentage = (40 ÷ 50) × 100 = 80%.
17. (c) £47.00 — First apply the 20% reduction: £65 × 0.8 = £52.00. Then take off the further £5: £52.00 − £5 = £47.00. Treating the 20% as a flat £20 rather than a percentage of the price, £65 − £20 − £5, gives £40.00. Applying the 20% reduction correctly but forgetting to take off the extra £5 leaves £52.00. Taking off the £5 first and then applying the 20% reduction to the smaller amount, (£65 − £5) × 0.8, gives £48.00.
18. (a) £150 — Value after year 1: £800 × 0.75 = £600. Value after year 2: £600 × 0.75 = £450. The loss during the second year alone is £600 − £450 = £150. £450 comes from giving the value remaining after 2 years, not the amount lost during the second year. £200 comes from working out the loss during the first year instead of the second: £800 − £600 = £200. £350 comes from working out the total loss over both years instead of just the second year's loss: £800 − £450 = £350.
19. (a) 75% — Method: to express one quantity as a percentage of another, divide the part by the whole and multiply by 100. Working: 18 ÷ 24 = 0.75, and 0.75 × 100 = 75. Answer: 75%. The distractors: 25% is the percentage she got wrong, 6 out of 24; 133% comes from dividing the whole by the part, 24 ÷ 18; 18% comes from writing the number of correct answers with a percent sign.
20. (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.
21. (c) £624.32 — A 4% rise is a multiplier of 1.04, applied once each year. After year 1: 5000 × 1.04 = 5200. After year 2: 5200 × 1.04 = 5408. After year 3: 5408 × 1.04 = 5624.32. The question asks for the interest, not the value of the account, so take away the amount invested at the start: 5624.32 − 5000 = 624.32. The total interest earned is £624.32.
22. (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.