Exploring Simple and Compound Interest Concepts

The video tutorial covers simple and compound interest, starting with an introduction and vocabulary setup. It explains the simple interest formula, i = prt, with examples, including calculating interest earned and finding the annual interest rate. The tutorial then transitions to compound interest, explaining the formula A = P(1 + r)^t and providing an example of calculating the balance after a set period. The video emphasizes understanding formulas and substituting values correctly.

What does the 'P' in the simple interest formula represent?

• Percentage of interest

• Payment period

• Principal amount

• Profit earned

How is the annual interest rate represented in the simple interest formula?

• As a percentage

• As a fraction

• As an integer

• As a decimal

What is the total interest earned on a $2000 bond at 3% simple interest after 5 years?

• $450

• $600

• $150

• $300

How do you convert 8 months into years for the simple interest formula?

• 8/10

• 4/6

• 2/3

• 8/12

What was the annual interest rate found for the deposit of $900 after 8 months?

• 2.2%

• 1.8%

• 2.5%

• 3.5%

In the compound interest formula, what does 'A' stand for?

• Added interest

• Annual interest

• Amount after

• Accrued amount

What is the balance after 4 years on a deposit of $1250 at 2.25% interest compounded annually?

• $1450.00

• $1325.75

• $1366.35

• $1400.60

How is the interest rate written in the compound interest formula?

• As a percentage

• As an integer

• As a decimal

• As a fraction

What does the 'T' in the compound interest formula represent?

• Total interest

• Time in years

• Transaction amount

• Term deposit

What principle does the compound interest calculation rely on?

• Interest on interest

• Fixed annual interest

• Decreasing principal

• Uniform distribution