Grade five, CIE IGCSE Maths

Revision Notes

What is compound interest?

Compound Interest is where interest is paid on the interest from the year (or whatever time frame is being used) before as well as on the original amount.

(This is different from Simple Interest where Interest is only paid on the original amount.)

How do you work with compound interest?

For COMPOUND changes (can be a decrease as well as an increase):

Keep multiplying by the decimal equivalent of the percentage you want.

Otherwise do the same as normal:

Identify “before” & “after” quantities

  1. FIND percentage we want:
    • Increase – ADD percentage to 100
    • Decrease – SUBTRACT from 100
  2. Write down a STATEMENT connecting “before” and “after”:
    “after is a percentage of before”
  3. Write down the statement as an EQUATION using decimal equivalent
    remember “is” means “=”


Compound Interest Example, IGCSE & GCSE Maths revision notes

Final Value = £1378 (to the nearest £)


Edexcel GCSE Maths Notes

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