Financial arithmetic

General Mathematics: Units 1 and 2

Introduction

Learning objectives

Recap: Simple interest formula

Compound Interest

Compound interest example

A quicker way to work out the end of year amount

The compound interest formula

Finding the interest earned

Example 1

Example 2

Using the CAS

Comparing simple interest and compound interest

Summary

Having already looked at Simple Interest in a previous video (and what a video it was!), I now look at Compound Interest ... which seems to be a much fair way to gain money (well, if you're investing!). Compound interest basically describes when you get interest on the interest each year and so you get a little bit more each time. This video is part of the Financial maths section of the General Maths course (VCE) and looks at how to find the Compound Interest on principal investments and loans. There are a number of worked examples and a detailed explanation of how the formula works. All explained in my unique and easy to understand style!

LEGAL STUFF (VCAA)

VCE Maths exam question content used by permission, ©VCAA. The VCAA is not affiliated with, and does not endorse, this video resource. VCE® is a registered trademark of the VCAA. Past VCE exams and related content can be accessed at www.vcaa.vic.edu.au

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