State the meaning of compound interest .

Compound interest is where interest is calculated based on the current amount (rather than the original amount).

True or False? Compound interest is the same as a repeated percentage increase .

True. Compound interest is the same as a repeated percentage increase .

True or False? If compound interest is applied to an amount each year, then the amount increases by the same value each year.

False. If compound interest is applied to an amount each year, then the amount does not increase by the same value each year. The amount of interest increases each year. For example, compound interest on $100 at 10% each year, increases by $10 in the first year and then $11 in the second year.

Define the term depreciation .

Depreciation is where an item loses value over time.

True or False? Depreciation is the same as a repeated percentage decrease .

True. Depreciation is the same as a repeated percentage decrease .

IGCSEMaths A: HigherEdexcelFlashcards

Compound Interest & Depreciation (Edexcel IGCSE Maths A)

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FrontInterest & Depreciation
State the meaning of compound interest.

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Cards in this collection (7)

State the meaning of compound interest.
Compound interest is where interest is calculated based on the current amount (rather than the original amount).
Compound interest is applied to the amount $P$ at a rate of $r$ % each year. Write down the equation for the amount after $n$ years.
Compound interest is applied to the amount $P$ at a rate of $r$ % for $n$ years. The final amount is found by calculating $P {(1 + \frac{r}{100})}^{n}$ .
True or False?
Compound interest is the same as a repeated percentage increase.
True.
Compound interest is the same as a repeated percentage increase.
True or False?
If compound interest is applied to an amount each year, then the amount increases by the same value each year.
False.
If compound interest is applied to an amount each year, then the amount does not increase by the same value each year. The amount of interest increases each year.
For example, compound interest on $100 at 10% each year, increases by $10 in the first year and then $11 in the second year.
Define the term depreciation.
Depreciation is where an item loses value over time.
An item that initially had a value of $P$ depreciates at a rate of $r$ % each year. Write down the equation for the value of the item after $n$ years.
An item that initially had a value of $P$ depreciates at a rate of $r$ % each year. After $n$ years the value of the item can be found by calculating $P {(1 - \frac{r}{100})}^{n}$ .
True or False?
Depreciation is the same as a repeated percentage decrease.
True.
Depreciation is the same as a repeated percentage decrease.

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