Simple & Compound Interest Worksheets

Two formulas, and a sheet that makes you choose

Simple mode gives a principal, an annual rate and a number of years, and asks for the interest and the total. Compound mode adds a compounding frequency and asks for the final amount and the interest earned.

Mixed puts both kinds on one page, and that is where the assessment happens. On a single-formula sheet a pupil substitutes into whatever they were shown at the start of the lesson and gets everything right without deciding anything. On a mixed sheet they have to read each question and work out which formula it wants first.

The formulas

• Simple interest. I = P × R × T, where P is the principal, R the annual rate and T the time in years. The total is A = P + I.
• Compound interest. A = P(1 + r/n)^(n·t), where n is how many times a year interest is added. The interest earned is A − P, which is the step people forget.

That last point is worth labouring. The compound formula gives the final amount, not the interest, and a pupil who writes down A when the question asked for interest has done every hard part correctly and lost the mark.

Where the numbers come from

Principals run from $500 up to $12,000. Rates are drawn from 2% to 10% in realistic steps. Nothing is a round trick number, so the arithmetic feels like arithmetic rather than a puzzle.

Compounding comes annually, or semi-annually, or quarterly, or monthly. Simple-interest problems run from one year to ten, while compound ones stop at five, and that cap is deliberate. Ten years compounded monthly is an exponent of 120, which stops testing the formula and starts testing whether the calculator was used correctly.

A worked one

$2,000 invested at 6% per year, compounded quarterly, for 3 years.

So P = 2000, r = 0.06, n = 4, t = 3. That gives A = 2000(1 + 0.06/4)^(4×3) = 2000 × 1.015¹² ≈ $2,391.24, and the interest earned is $391.24.

The key prints both figures to two decimal places, so a pupil checking their own work can see whether they missed the formula, the rate conversion, or just the rounding. Those are three different mistakes and they need three different conversations.

Why the difference is worth showing, not telling

Simple interest grows in a straight line. The same amount is added every year, for ever.

Compound interest earns interest on the interest, so the balance curves upward, and the more often it compounds the steeper that curve gets. A mixed sheet makes that visible in a way an explanation does not: two problems with the same principal, the same rate and the same number of years produce visibly different answers, and the pupil has just calculated both.

Which is the whole financial-literacy lesson in one page. Compounding is the best thing that can happen to a saver and the worst thing that can happen to somebody carrying a credit-card balance, and it is the same arithmetic either way.

A teaching order that works

Simple first, until substitution into I = P·R·T is automatic. Then compound on its own, where the only new thing is the exponent. Then mixed, as an assessment rather than as practice.

For a pupil revising alone, generate a fresh sheet each time. The numbers change every generation, so the method becomes automatic without the answers becoming memorable, and the key lets you diagnose your own errors instead of merely counting them.