| Summary: | The first part of this lesson deals with calculating simple interest using the formula I = P x r x t and also using this formula to find the Principal, interest rate & time.
The second part of this lesson involves calculating compound interest using a table and then using the formula A = P(1 + i)n to find the Amount. Finding the Principal, rate & time using this formula is also covered.
After this lesson, you will be able to:
- calculate simple interest using the formula I = P x r x t.
- use the simple interest formula to find the principal, rate and time.
- define compound interest.
- use a table to find the amount accumulated using compound interest.
- find the number of compounding periods.
- calculate compound interest using the formula A = P(1 + i)n where n is the number of compounding periods.
- use the compound interest formula to find the principal, rate & time.
- use the Rule of 72, a helpful tool to estimate how long it will take for money to double.
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