Growth and decay, compound interest worksheet — GCSE Higher

1.A company had 8000 employees. The number of employees decreased by 5% in the first year, and then increased by 5% in the second year. Work out the number of employees at the end of the second year, to the nearest whole number.

2.The concentration of a pollutant in a lake, in arbitrary units, follows the recurrence C_{n+1} = 0.75C_n + 40, with C_0 = 500: each week, 25% of the pollutant breaks down naturally, and then a further 40 units enter the lake from run-off. An ecologist classifies the lake as safe once C_n first drops below 300. Find the first whole number of weeks after which the lake is safe.

3.A savings account starts with £500. Each year, 4% interest is added, and then £30 is withdrawn from the account. Which recurrence correctly models the balance, £S_n, after n years, with S_0 = 500?

4.Aisha invests £3200 in Account A, which pays 5% compound interest each year. She also invests £3200 in Account B, which pays 3% simple interest each year. Work out how much more Account A is worth than Account B after 2 years.

5.A vehicle is worth £18000. Its value decreases by 15% each year. Using the recurrence V_{n+1} = 0.85V_n, with V_0 = 18000, find the first whole number of years after which the vehicle's value drops below £10000.

6.A car is bought for £9000. Its value decreases by 8% each year. Work out its value after 2 years.

7.A car is bought for £12000. Its value falls by 15% in the first year and by 10% in each year after that. Work out the value of the car 3 years after it was bought.

8.A savings account pays 3.5% compound interest each year. Bilal invests £1200. Work out how much interest, in total, he earns after 2 years, to the nearest penny.

9.A trust fund contains £8000. Each year, 5% interest is added, and then £600 is paid out to a charity. Work out the amount remaining in the fund after 2 years.

10.A machine is bought for £8500. Its value depreciates by 6% each year. Work out the value of the machine after 3 years, to the nearest pound.

11.A population of penguins on an island is 2400. The population is predicted to grow by 7% each year. Work out the predicted population after 2 years, to the nearest whole number.

12.A process is modelled by the recurrence P_{n+1} = 0.6P_n + 40. As n increases, P_n approaches a long-run value L, which satisfies L = 0.6L + 40. Solve this equation to find L.

13.The value of a rare coin increases by 12% each year. The coin is currently worth £270. Work out the value of the coin after 2 years, giving your answer to the nearest penny.

14.Leah puts £4000 into a savings account paying 3% compound interest each year. At the end of 2 years she takes out all of the money and spends £1500 of it on a laptop. Work out how much of the money she has left.

15.Before a charity campaign, donations were £6400 per month. Donations grew by 8% in the first year after the campaign, and then fell by 3% in the second year as interest faded. Work out the amount donated per month at the end of the second year, to the nearest pound.