Exploring Simple and Compound Interest Concepts

The video tutorial covers both simple and compound interest problems. It explains how to choose the correct formula based on the problem's wording and whether the question asks for interest only or the total amount. The tutorial provides examples of calculating simple interest and compound interest, including finding the total amount and interest earned. Key formulas such as I = PRT for simple interest and A = P(1 + r)^t for compound interest are demonstrated through practical examples.

What is the first step in determining which interest formula to use?

• Find out the time period.

• Determine the interest rate.

• Calculate the principal amount.

• Identify if the problem mentions 'simple' or 'compound' interest.

How do you find the total amount in a simple interest problem?

• Subtract the interest from the principal amount.

• Multiply the principal by the rate and then by the time.

• Add the interest earned to the principal amount.

• Divide the principal by the interest rate.

What is the principal amount in the first example?

• $3,000

• $1,250

• $12,000

• $725

What formula is used to calculate compound interest?

• A = P(1 + r)^t

• I = Prt

• A = P + I

• I = A - P

After how many years was the total amount for Gavin's account calculated?

• Five years

• Six years

• Eighteen months

• Four years

How do you calculate the interest only in a compound interest problem?

• Subtract the principal from the total amount.

• Add the principal to the total amount.

• Multiply the principal by the rate.

• Divide the total amount by the principal.

What was the interest rate for Karen's loan?

• 3%

• 6.5%

• 2.5%

• 2.4%

How much interest did Jack's aunt agree to pay annually?

• 2.5%

• 3%

• 9%

• 6.5%

How is the time converted in a compound interest problem when given in months?

• It remains unchanged

• Divide by 12

• Multiply by 12

• Multiply by 6

What was the total amount in Dylan's account at the end of the year?

• $780

• $2,693.12

• $13,440

• $10,888.50