Compound Interest Explained | Maths GCSE

This short explains how to solve compound interest problems for Maths GCSE (Higher and Foundation.)
Here are the key points to remember:
- First, find the multiplier from the percentage increase by dividing by 100 and adding 1 (eg: 2% becomes: 2/100 + 1 = 1.02)
- Then find the final amount by multiplying the initial amount by this value for as many times as the question states.
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[@revisionboost]

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[@MrPaulc222]

I use a calculator for these:
1600x(102/100)^11 . The order of operations dictates that the division in brackets is dealt with first, then the exponent, then the multiplication last - which is exactly what we want.

[@madhup03]

Yep! Amount = Principal x [ 1 + (Rate%/100) ]^Time

[@septer4058]

compound intrest would add ur money gained annually this formula does not do that this is just normal intrest for 11 years?

[@Algoo-X]

😮

[@qaasimhasan2312]

47

[@andreacoley9227]

how do you get from 0.02 t0 1.02?

[@chaoticstarfish3401]

If you gain an extra 2% of your money every year, you end up with 102% of your inital money, so multiply by 1.02 11 times to get the result after 11 years.

[@Czyborg]

basically just add 1 to the decimal

[@septer4058]

@@Czyborg 🤦‍♂️

[@iCalculatorInfo]

Why did the student do multiplication problems on the floor? The teacher told him not to use tables.

[@anniemoony2579]

😂

[@prosperidehen2775]

😂😊

[@aleezafatima415]

How you got 102??
Explain plz

[@minktuu]

For calculating Compound Interest, we require this formula
A= P ( 1 + r/n ) ^ n*T
Where, A is the amount
P is the principal
r is the rate
n is the frequency (quarterly, half, annual, weekly)
T is time
Actually it is not 102 but it is 1.02.
And it is actually achieved by division of 2 by 100 giving you the r=0.02.
Since percent means per cent or per hundred. So 2% means 2/100 or 0.02
Now use the above formula
= 1600( 1 + 0.02/1)^ 1*11
= 1600( 1 + 0.02)^11
= 1600( 1.02)^11
= 1989.39

[@brooklynandlesther]

@@minktuuyou just made that so complicated for no reason
It’s 1.02 because what is 1600x1? 1600 soooo when you add the interest (0.02), it makes it 1.02 😂

[@MetaFootballTV]

So 400 pounds after 11 years.

[@euchariaowoeye.1234]

😢😢😢

[@alesanaalesana5430]

Please stop confusing people with incorrect methods.

[@zzzz-yw4zk]

@@morganfreeman2068this is just an approximation and indeed not the method that’d give the exact answer

[@xscout9572]

Well this is as he said an approximate method of compund intrest . And not the real deal , just like how M=W*M or smth smth i frogot

[@24reyeser]

This is wrong

[@septer4058]

agreed

[@septer4058]

u would have to add the money gained to the p annually this guy needs to step up his game I just turned sixteen 🙄

[@johnt6582]

You wish it was that easy go back to flipping burgers buddy