Simple and compound interest, hire purchase and mortgages, the cost of borrowing, and the growth or decay of value over time.
5 narrated scenes. Press play, listen and read along — the points appear as they are explained. Use ‹ Prev / Next › or the scene bar to jump to any scene.
Borrow $15 000 and repay $18 000 — is that a good deal? This lesson gives you the tools to decide, and to answer the money questions in Paper 02.
Narration uses your device’s built-in voice. No sound? Switch to “Captions only” — the captions advance on their own.
Compare the two for different amounts, rates and times.
Copy these into your notebook in your own words — that is how they stick.
I = PRT/100; A = P + I. T is in years (months ÷ 12).
A = P(1 + r/100)ⁿ; C.I. = A − P. Half-yearly: r/2, 2n periods; quarterly: r/4, 4n.
HP price = deposit + instalments; cost of credit = HP − cash price; interest as % of cash/principal.
Total repaid = payment × number of payments; interest = total repaid − loan.
V = V₀(1 − r/100)ⁿ for depreciation, V₀(1 + r/100)ⁿ for appreciation.
Constant loss each year: V = V₀ − (r% of V₀) × n.
Compound interest > simple interest for the same P, R, T when T > 1.
Rate and time must match: per annum with years, per month with months.
3 quick games on this lesson. Earn XP and badges as you play — your best score for each game is saved. Games are for practice and do not change your exam readiness. More games in the Mathematics Arcade.
8 items modelled on real CSEC Paper 1 questions. Choose one answer for each, then check. Aim for 80% or better. Work each item on paper first.
Write full answers, then reveal the mark scheme and tick the points you earned (18 marks in total). Show all your working — method marks count. Your answers are saved on this device.
Question 1 [9 marks]
Mr Brown invests $8 000 at 4% per annum.
(a) Calculate the simple interest earned in 3 years. [2]
(b) The same money is invested at 4% per annum compound interest for 3 years. Calculate (i) the amount, (ii) the compound interest, correct to the nearest cent. [4]
(c) Find the difference between the two kinds of interest. [1]
(d) State TWO reasons why compound interest is greater than simple interest. [2]
Question 2 [9 marks]
A sofa has a cash price of $2 400. It may be bought on hire purchase with a deposit of 20% of the cash price followed by 18 monthly payments of $135.
(a) Calculate the deposit. [1]
(b) Calculate the total hire purchase price. [2]
(c) How much more is paid by hire purchase, and what is this as a percentage of the cash price? [3]
(d) If the sofa loses 12% of its value each year (reducing balance), find its value after 2 years. [3]
Find these in your own past-paper booklets for extra timed practice. Items above are written in the style of these papers; any adapted from a specific question say so.