Episode 4 — Financial Maths

Compound Interest

Learners will be able to:

• Calculate the amount in the bank after one year of interest using the simple interest formula. • Determine the total amount in the bank at the end of each subsequent year by substituting the previous year's amount into the simple interest formula. • Apply the compound interest concept to calculate the total amount gained on an initial investment over three years. • Identify the principal amount, rate of interest, and time period required for calculating compound interest using a specific example. • Calculate the total amount of interest gained by subtracting the original amount from the total at the end of three years.