Multipliers

Transform a percentage increase into a decimal multiplier.

Example: Increase by 5% → 100% + 5% = 105% → × 1.05. Decrease by 10% → 100% - 10% = 90% → × 0.9

Step-by-Step Method

For a 2-year increase, multiply the principal by the multiplier, then multiply the result by the multiplier again.

Simple vs Compound

Simple interest only pays on the original amount. Compound interest pays on the NEW total every year.

Reverse Percentages

To find the original value AFTER a change, divide by the multiplier.

Example: Sale price £90 (10% off) → 90 ÷ 0.9 = £100 original.

The Power Formula

Calculate compound interest for many years in one step.

Formula: Total = P × (multiplier)ⁿ

Example: £1000 for 5 years at 3%: 1000 × 1.03⁵ = £1159.27

Exponential Decay

Use a multiplier less than 1 to model things losing value over time (depreciation).

Example: Car losing 20% value per year for 3 years: P × 0.8³

Financial Interest Problems

Interest is often calculated monthly or quarterly. The period (n) must match the interest rate frequency.

Comparing Deals

Work out the final amount for two different interest options to see which is the better deal over a set number of years.