Deriving the Annual Compound Interest Formula

Deriving the Annual Compound Interest Formula
For more free math videos, visit http://JustMathTutoring.com

Category:

Education

Tags:

• math
• annual
• interest
• finite
• financial
• compound
• simple
• money
• mortgage
• rates
• example
• justmathtutoring.com

[chocopie645]

thanks for the help! wayy better than my math teacher blabbing on and on D:

but i'm still wondering, why is the 1+ there in the 1+ .06 ?

(sorry if that sounds stupid, but pleease reply!)

thanks :)

@patrickJMT

[patrickJMT]

@chocopie645 if you multiply a number by 1, it does not change. if you multiply it by 1.06, it gets larger by .06 or 6%

[MetalBassjunkie420]

Do you have a video where I can find help for calculations like this one?: What is the value of an annuity that will pay you $5000 each year for 30 years at a discount rate of 6%? What is the value of the annuity if you use a 12% discount rate?

[patrickJMT]

@MetalBassjunkie420 i do not have any videos about annuities although i may make some soon!

[TheDuskMar]

What is this?

Pe^rt

Principal times e to the rate times time power

[patrickJMT]

that is for CONTINUOUS compounding, not annual

[laxmanica43]

@MrJordan20061991 he does use .06, he just simplifies the (1+.06)

[ian559fresno]

@patrickJMT Dear Patrick, can you please make a video on Newton's law of cooling? I searched it on youtube and it was a suggestion with your name next to it but I guess there was no video. (Search Newtons law of cooling p...and patrickjmt pops up next to it)? Thanks

[HerroKerushii]

thanks!!!!!!!!!!!!!!!!

[cyqnus]

enable the caption and then see at 0:23, I guess the caption feature might get busted

[hankOSFP1234]

it is einstein

wake up mr jordan

[MrJordan20061991]

Isn`t it 0.06 because it is 6% , not 60