Compound Interest

About this exercise

Interest that is added to the balance and then earns interest itself.

Example problems

A few of the problems this exercise asks. The printable worksheet holds ten fresh ones.

$96 is invested at 50% annual interest, compounded annually for 2 years. Find the final amount (in $).
$92 is invested at 50% annual interest, compounded annually for 2 years. Find the final amount (in $).
$900 is invested at 10% annual interest, compounded annually for 2 years. Find the final amount (in $).
$2000 is invested at 10% annual interest, compounded annually for 3 years. Find the final amount (in $).

Try it yourself first — open a section below only if you get stuck.

How to solve it

Multiply the balance by the growth factor once per period. Ten percent means multiplying by 1.1 each time.

Worked example

1000 at 10 percent for 2 years grows to 1000 x 1.1 x 1.1 = 1210.

Common mistake

Calculating simple interest instead. The extra 10 over two years is exactly the compounding.