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The starting amount is 100% of itself, so an increase uses a multiplier bigger than 1 and a decrease uses a multiplier smaller than 1. For example, a 6% increase uses 1.061.061.06, while a 6% decrease uses 0.940.940.94.
To build a multiplier, rewrite the new percentage as a decimal. So 8% increase means 108%=1.08108\% = 1.08108%=1.08, and 25% decrease means 75%=0.7575\% = 0.7575%=0.75. Compound interest and depreciation both use these multipliers again and again over time.
Question 1
3 marksJesy invests £8000 for n n\,n years in a savings account.
To find the value, VVV, of her investment after n n\,n years she uses the formula:
V=8000×(1.025)n V = 8000 \times (1.025)^n V=8000×(1.025)nIn percentage calculations, what is the multiplier for a 6% increase?
Revision notes for Edexcel GCSE Maths Compound Interest and Depreciation. Open the guide for explanations and worked examples. Written against the Edexcel GCSE Maths (1MA1) specification, so the content matches what's examinable rather than general Maths background.
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A laptop loses 7%7\%7% of its value each year. Which multiplier is used to calculate its value after each year?
