Calculating compound interest rates
I can calculate compound interest rates given start and end values.
Calculating compound interest rates
I can calculate compound interest rates given start and end values.
These resources will be removed by end of Summer Term 2025.
Lesson details
Key learning points
- If the compound interest rate is fixed but unknown, you can calculate it.
- To calculate it you need to know the start and end values, as well as the period of time.
- The interest rate is interpreted based on the period of time.
- The period of time could be per day/week/month/year etc.
Keywords
Rate of interest - The rate of interest is the percentage by which an amount increases.
Compound interest - Compound interest is the interest calculated on the original amount and the interest accumulated over the previous period.
Exponential form - When a number is multiplied by itself multiple times, it can be written more simply in exponential form.
Common misconception
When using multipliers, pupils can mistake a decimal for the percentage decrease. e.g. 0.52 is a 52% decrease, rather than recognising a 48% decrease.
Reminding students that a decimal multiplier greater than 1 means an increase, and a decimal multiplier less than 1 means a decrease. The latter requires a subtraction from 1 or 100%.
Licence
This content is © Oak National Academy Limited (2024), licensed on Open Government Licence version 3.0 except where otherwise stated. See Oak's terms & conditions (Collection 2).
Lesson video
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