Explains, with examples, what compound interest is and how to calculate it using a formula. Also shows how to work backwards to calculate the present value of an investment, how compound interest is calculated for different compounding periods, and how to calculate the interest rate or the number of compounding periods if you know other figures. Includes a set of practice questions.

Concepts

exponential decay, exponential growth, compound interest

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Additional Tags

compounding period, constant percent rate, present value, math is fun, oh.math.hsf.le.1c, interest rate, recognize when a quantity grows or decays by a constant percent rate per unit interval relative to another

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Classroom Considerations

• Knovation Readability Score: 3 (1 low difficulty, 5 high difficulty)
• The intended use for this resource is Instructional

Common Core

HSF-LE.A.1.c