SS - Simple and Compound Interest Lesson

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Simple and Compound Interest

Introduction

Simple Interest

In Your Notebook: Please take down important notes, such as formulas, and attempt the practice examples on your own before viewing the solutions!

Compound Interest

A= P (1 + r/n) nt (superscript)

A = Total Amount

P = Principal Amount

r = interest rate

n = number of times compound annually

t = time in years

Compound interest can be compounded annually or it can be compounded a few times a year such as quarterly, or monthly.

Take a look at the difference in the following equations for an account with a principal value of $50.00 and a 3% interest rate after 5 years. 

Compounded Annually A = 50(1 + 0.03)5 superscript A=$57.96 Compounded Quarterly A=50(1+0.03/4_4*5 superscript A=$58.06 Compounded Monthly A=50(1+0.03/12)12*5 superscript A=$58.08

 

Click on the checkmark under the activity to check your answers.

Interest Problems

 

Simple and Compound Interest

Practice: Attempt to determine the missing values in the activity. Click on the check in the bottom corner to move forward.

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