Compound interest calculations
I can carry out compound interest calculations.
Compound interest calculations
I can carry out compound interest calculations.
These resources will be removed by end of Summer Term 2025.
Lesson details
Key learning points
- Compound interest is recalculated at each stage.
- By considering the calculations for compound interest, you can be more efficient.
- Through understanding the structure, you can reverse the calculations to find the original amount.
- Calculators are very useful here as they can be programmed efficiently.
Keywords
Compound interest - Compound interest is the interest calculated on the original amount and the interest accumulated over the previous period.
Common misconception
Failing to understand the difference between simple and compound interest. And, therefore finding the interest for one time period and multiplying it by the number of time periods.
Pupils can forget to transfer the year end balance as the starting balance of the next year. Using repeated language can help. E.g. "At the end of year 2 there was ... in the account, so, at the beginning of year 3 there was ... in the account."
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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