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Compound percentages

This is an excerpt from the “Compound Interest” presentation in Boardworks Maths for Australia, which contains 129 presentations in total. This is an excerpt from the “Compound Interest” presentation in Boardworks Maths for Australia, which contains 129 presentations in total.

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Compound percentages

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  1. This is an excerpt from the “Compound Interest” presentation in Boardworks Maths for Australia, which contains 129 presentations in total. This is an excerpt from the “Compound Interest” presentation in Boardworks Maths for Australia, which contains 129 presentations in total.

  2. Compound percentages A jacket is reduced by 20% in a sale. Two weeks later, the shop reducesthe price by a further 10%. What is the total percentage discount? It is not 30%. To find a 20% decrease, multiply by 80% or 0.8. To find a 10% decrease, multiply by 90% or 0.9. original price × 0.8 × 0.9 = original price × 0.72 72% of 100 is equivalent to a 28% discount altogether.

  3. Compound percentages Jenna invests in some shares. After one week the value goes up by 10%. The following week they go down by 10%. Has Jenna made a loss, a gain or is she back to her original investment? Show your working.

  4. Compound percentages

  5. Compound interest Jack puts $500 into a savings account with an annual compound interest rate of 5%. How much will he have in the account at the end of 4 years if he doesn’t add or withdraw any money? As a single calculation: $500 × 1.05 × 1.05 × 1.05 × 1.05 = $607.75 Using index notation: $500 × 1.054 = $607.75

  6. Compound interest

  7. Compound interest Rena is a financial advisor. She needs to work out where her client’s money would best be saved depending on how long they want to invest for. Short term investment: 1 year Medium term investment: 3 years Long term investment: 10 years Bank account Shares Building Society $3500 3.4% annual interest $1000 7.9% annual interest $10000 1.2% annual interest Where is the best place to invest for each time period?

  8. Repeated percentage change Powers are used in solving problems involving repeated percentage increase and decrease. The population of a village increases by 2% each year. If the current population is 2345,what will it be in 5 years? What will the population be after 10 years?

  9. Repeated percentage change The value of a new car depreciates at a rate of 15% a year. The car costs $24 000 in 2005. How much will the car be worth in 2013? To decrease the value by 15%, multiply it by 0.85. There are 8 years between 2005 and 2013. $24 000 × 0.858 = $6540 (to the nearest dollar)

  10. Repeated percentage change

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