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Compound Interest

Compound Interest Is lesson #116 in the Saxon Math book. I picked this lesson because when I was going through my math book this lesson looked hard. We haven't studded this lesson yet and i thought it would help if I did my Prezi that.

Maddie Guyer

on 21 September 2010

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Transcript of Compound Interest

Compound Interest Interest- A percent of
the money deposited. Simple interest
is learned first. $100.00 Principal
$6.00 First-Year Interest
$6.00 Second-Year Interest
+ $6.00 Third-Year Interest
$118.00 Total Principal- The amount
deposited Next we will figure this
problem out, but first
lets learn the meanings
of the words in this problem. There is a diffrence between
simple interest and compound
interest. Simple interest is paid on
the principal only and not
paid on any accumulated
interest. Example Most interest bearing accounts, however, are compound interest accounts. If you deposited $100 in an account
that pays 6% simple interest ,you
would be paid 6% of $100 ($6) each
year your $100 was deposited. If you take your money out after
three years, you would have a
total of $118.00. $100.00 Principal
$6.00 First-Year Interest
$6.00 Second-Year Interest
+ $6.00 Third-Year Interest
$118.00 Total In a compound-interest account,
interest is paid on accumulated
interest as well as the principal. Say you deposited $100 in an
account with 6% annual
percentage rate, the amount
of interest would be paid
each year increased if the
earned interest is left in the
account. After three years you
would have a total of $119.10. That is all I can tell you
about compound interest
but here are some pictures
of the formula and graphs. $100.00 Principal
+ $6.00 First-Year Interest
(6% of $100) $106.00 Total after one year
+ $6.36 Second-Year interest
(6% of $106.00) $112.36 Total after two years
+ $6.74 Third-Year Interest
(6% of $112.36) $119.10 Total after three years
Full transcript