Who this is for: Cambridge IGCSE Mathematics (0580/0607) students who want Earnings, Simple and Compound Interest — calculating wages, simple interest and compound interest — to become a reliable source of marks instead of a topic they only half-remember.
What query it owns: how to understand and revise Earnings, Simple and Compound Interest in Cambridge IGCSE Mathematics.
Why this is safe: this page owns the Earnings, Simple and Compound Interest revision-guide angle, while Tutopiya’s Earnings, Simple and Compound Interest subtopic page owns the learning resource and the free Earnings, Simple and Compound Interest quiz owns the practice.

Earnings and interest questions combine arithmetic with real-world context in Cambridge IGCSE Mathematics (0580/0607). If you know the wage formulas and can distinguish simple from compound interest, you secure reliable marks on applied Number questions. This guide explains exactly what the subtopic covers, how to handle the question types that actually appear, and where to practise each skill.

Key takeaways

• Earnings = rate × time (hourly wage × hours, or weekly/monthly salary calculations).
• Simple interest (SI): I = PRT/100 — interest calculated on the original principal only.
• Compound interest (CI): amount = P(1 + r/100)ⁿ — interest earns interest each period.
• Always convert the rate to a decimal or use the /100 form consistently.

What are Earnings, Simple and Compound Interest in Cambridge IGCSE Maths?

Earnings, Simple and Compound Interest covers how money grows or is paid over time. In Cambridge IGCSE Mathematics the subtopic includes calculating wages from hourly rates, overtime and piecework, simple interest using I = PRT/100, and compound interest using repeated percentage increase. Examiners favour multi-step word problems with clear financial context.

You can read the full explanation, worked examples and notes on Tutopiya’s Earnings, Simple and Compound Interest subtopic page before you attempt questions.

The core ideas you must master

These five ideas appear again and again. Learn what each one means and the exam phrasing that signals it.

Idea	What it means	How the exam uses it
Hourly wage	Pay = rate × hours worked	”Work out her total pay for the week”
Simple interest	I = P × R × T ÷ 100	”Calculate the simple interest on $2000 at 4% for 3 years”
Total with SI	Amount = P + I	”Find the total amount after 5 years”
Compound interest	A = P(1 + r/100)ⁿ	”Calculate the amount after 2 years at 5% compound interest”
CI vs SI	CI grows faster because interest compounds	”By how much more is CI than SI?”

How to calculate compound interest — step by step

The standard Cambridge method uses the multiplier form A = P(1 + r/100)ⁿ.

1. Identify P (principal), r (rate %) and n (number of time periods). Example: $3000 at 4% for 3 years → P = 3000, r = 4, n = 3.
2. Write the multiplier: 1 + 4/100 = 1.04.
3. Raise to the power n: 1.04³ = 1.124864.
4. Multiply by P: 3000 × 1.124864 = $3374.59 (round as instructed).
5. For interest only, subtract P: $3374.59 − $3000 = $374.59.

Once you have worked through a few, test yourself with the free Earnings, Simple and Compound Interest quiz — it tells you fast whether the method has actually stuck.

Simple vs compound interest: which formula does the question want?

Students lose marks by applying the wrong interest type. Use the signal words in the question to decide.

Type	Formula	Signal words
Simple interest	I = PRT/100	”simple interest”, “at a fixed rate”
Compound interest	A = P(1 + r/100)ⁿ	”compound interest”, “interest added each year”
Earnings	rate × time (+ overtime rules)	“hourly rate”, “overtime paid at…”
Compare SI and CI	Calculate both separately	”How much more interest…”

Earnings and Interest in past-paper wording: command words that matter

Most lost marks come from misreading the command word or confusing SI with CI.

Command word / phrase	What the question wants	Typical stem
Work out her total pay	Multiply rate by hours, add overtime	”She earns $12 per hour and works 38 hours…”
Calculate the simple interest	Use I = PRT/100	”Calculate the simple interest on $5000 at 3.5% per year for 4 years.”
Calculate the amount after … years	May be SI (add I) or CI (multiplier)	“Calculate the amount after 3 years at 6% compound interest.”
Find the difference between	Two separate calculations	”Find the difference between the CI and SI on $1000…”
Show that	Prove a given financial result	”Show that the total interest is $240.”
Give your answer correct to …	Round to stated accuracy	”Give your answer correct to the nearest cent.”

Worked exam-style stems (how to answer the wording)

Practising the wording — not just the maths — is what full marks reward.

1. “Tom earns $9.50 per hour. He works 42 hours in a week. Work out his total pay.” 9.50 × 42 = $399. Reward: correct multiplication, units stated if required.
2. “Calculate the simple interest on $4000 at 5% per year for 3 years.” I = 4000 × 5 × 3 ÷ 100 = $600. Reward: formula stated or implied, correct answer.
3. “$2500 is invested at 4% per year compound interest. Calculate the total amount after 2 years.” A = 2500 × (1.04)² = 2500 × 1.0816 = $2704. Reward: multiplier method, not SI formula.

When you can recognise the wording instantly, work the full set on the Number topical past-paper questions and the Earnings, Simple and Compound Interest quiz to lock the method in.

How Earnings and Interest connects to the rest of Number

Interest calculations build on Fractions, Decimals and Percentages. Compound interest links forward to Exponential Growth and Decay. Currency contexts overlap with Money Conversions. When you are ready to mix topics, the Cambridge IGCSE Maths resource hub lets you move straight from a weak subtopic into the next.

Common mistakes students make

• Using the simple interest formula when the question says compound.
• Forgetting to add the principal when asked for total amount with SI.
• Using years as the time period when the question gives months (convert first).
• Rounding too early in CI calculations — keep full calculator value until the end.

When you need more support

If interest or earnings questions keep tripping you up, work through the Fractions, Decimals and Percentages quiz and the Number topical past-paper questions to pinpoint the exact gap, then get focused help from a Cambridge IGCSE Maths tutor to fix it quickly.

Frequently asked questions

Is compound interest hard in Cambridge IGCSE Maths? No — the formula A = P(1 + r/100)ⁿ is fixed. The challenge is identifying P, r and n correctly and not confusing SI with CI.

What is the simple interest formula? I = PRT/100, where P is principal, R is the annual rate in percent, and T is time in years.

Why is compound interest more than simple interest? Because each year’s interest is added to the principal, so the next year’s interest is calculated on a larger amount.

How do I revise Earnings and Interest effectively? Read the subtopic notes, practise both SI and CI questions by hand, then take the Earnings, Simple and Compound Interest quiz to check your method.

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