Loading in 5 sec....

Calculating Simple & Compound InterestPowerPoint Presentation

Calculating Simple & Compound Interest

- 150 Views
- Uploaded on
- Presentation posted in: General

Calculating Simple & Compound Interest

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.

- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -

Calculating Simple & Compound Interest

Simple interest (represented as I in the equation) is determined by multiplying the interest rate by the principal by the number of periods. (Same amount every year)

Principal sum (P)- The initial amount of money invested or borrowed (ie. $10, 000)

Interest rate (r)- The amount charged or given to the principal sum (ie. 5%)

Interest period (t)- The number of years you plan to invest or borrow (ie. 5 years)

Tim, a grade 9 student at Preston High school received $1000 from his grandma for his birthday. After learning about savings in his BBI class, he decides to go to his bank and put the money into a savings account at an interest rate of 3% annually until he goes to university in 4 years.

Calculate the simple interesting using the simple interest equation: I=Prt

- P = $1000
- r= 3% annually
- t= 4 years
I = 1000 x 0.03 x 4

= 120

Therefore Tim will have made $120 in interest over the 4 years resulting in a total of $1120.

- Interest calculated on the amount saved or borrowed plus any interest already accumulated