Interest (part 2)

[ACfireandiceDC]

My brain is about to explode from watching this...

[TIJulianna471]

I like

[TheLoveformankind]

U NEED TO SHARPEN UR GREEN PEN !

[dimonddanindd]

Nope @mrhollywood interest is added towards that amount. Find out the interest rate usually it's 20-50!% Longer it takes the higher...for example 5000 owed in 2 t yrs= 20 grand PLUS capital...Wait it out! Trust Me. Wellllll worth it!! Yes u can garnish wages but I would definitely Wait...Again,Trust me, I know.Call my 818 I seriously can help w this..I owe u neway xox lol :)

[vickiormindyb]

I should have charged my brother COMPOUND interest.

I bet I'd have my money back if I had.

[vickiormindyb]

Robb made it so easy to understand I was able to get this on the first viewing.

He LOOVES banking and finances and everything to do w/ that arena. Although he admits he wasn't thrilled w/ World Trade Exchanges and reports, and I still don't even know what that is. So I'll have to take his word for it.

[baller84milw]

You could just use the simple interest equation i=(p)(r)(t)

[gabriellamariee]

LOL "the magic of e"

[yodenpopen]

just as an additional note here, if you do borrow with a compounded interest rate, you can 'force' that interest to be simple interest by paying off the interest at each interval of time...

for example if you borrow 100 dollars and it is compounded monthly at 10% you can simply pay off that 10% (10 dollars in this case) each month so that the next month you are only being charged 10 dollars again on the second month... and so on with each month until you finally can pay off the whole principle.

[thegoonist]

@yodenpopen are you sure thats allowed with bank loans nowadays?

[FortNikitaBullion]

@thegoonist Of course. Most loans work like this to some extent. You don't buy a house and pay a lump-sum 30 years later.

[thegoonist]

@FortNikitaBullion i see. so essentially these loans are simple interest loans. why then do they call it compounded interest when it actually isnt?

[FortNikitaBullion]

@yodenpopen You're not really making it become simple interest, but paying off part of the debt before it can compound. The earlier payments will cost you more when you consider the time-value of money.

[vickiormindyb]

@FortNikitaBullion What does 'time-value of money' mean?

I have practically no intuition for this, but I'm going to keep trying. I was able to understand Algebra I by accessing Khan Academy, so I'm not going to give up trying to get it.

[Cecelle8910]

@yodenpopen Yeah! I THINK that's what "Interest Only Mortgages" are. In Compound Interest, one pays Interest on the Interest. I'm getting it, ain't I?

[kphantomkk]

@yodenpopen Yeah that's cool but when your mortage is 400k your interesting is going to be gigantic. You will be moving nowhere.

[SeekMeIn]

Thanks

[EngrishTeacherRyan]

keep up the good work Sal!

[miamimanni]

Isn't 1+(.5)(.5)=1.25

[Valefarous]

Good video series in general! I'm enjoying reviewing this as I head into calculus.

[Juchrisad]

Very pleased with your visual and simple approach to the this topic particularly for non-financial background people like me- For people with little o no algebra background the factoring out of (1+r) for t>0 or Time greater than day of the actual loan it might be slightly more complex to grasp - Nevertheless well done!