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Simple Interest and Compound Interest

Units and Fractions Simple Interest and Compound Interest

🎬 Video Tutorial

(0:27) Simple Interest Calculation: For multi-year periods, multiply the first year’s interest by the number of years. For example, £100 at 5% over 3 years earns 3 × £5 in total.
(1:33) Compound Interest Growth: Compound interest increases each year because interest is added to the principal. The formula is: principal times (1 + interest rate) raised to the power of the number of years.
(2:57) Simple Interest vs Compound Interest: Simple interest is calculated only on the original principal, while compound interest is calculated on the principal plus any previously earned interest.

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📂 Revision Cards

Simple interest calculation example, showing the principal amount, interest rate, and time in years, resulting in £15 interest over 3 years.

Compound interest calculation over three years showing the formula and total amount of £115.8 from an initial £100.

Comparison of simple interest and compound interest formulas, showing calculations for total amount and interest earned over years.

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