Introduction to interest
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Uploaded by khanacademy on Apr 22, 2008
What interest is. Simple versus compound interest.
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@NoughNeaux Each year you pay 10% of interest on the NEW balance. So in year one you owe $100 + 10% which is $100 * 1.1 = $110 (since you owe the principal loan and interest). The reason he squares 1.1 is because he is trying to shorten the expression. For instance, in year 4 you would owe...$100 x 1.1 x1.1 x1.1 x1.1 = $146. But instead you can shorten that expression to $100 (1.1) to the power of 4. Since there are four 1.1's
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7:40 - Why do you square "(1.1)" ?
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@MrDevin666 1.1 is the same as 110% but in decimal form.
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@iNinjaNotes Yeah thanks for the reply, but I got it. He said that you undistribute the 110, which made no sense, he meant factor out 110.
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@MrDevin666 1.1 is the same as 10% interest rate on top of your initial investment which is 100%, 110% is equal to 1.1.
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This stuff is simple, BUT I have one question to ask for an answer. At 7:41 he changed it from 110 + 10%(110) to 110(1.1), where does that 1.1 come from?
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OMFG ... we spend like 2x1hour lectrue on this.
and did not make any sense at all.
yet you spend 10mins and I totally got it...
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lol we've learned this in 8th grade honors
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my interest in this video is equal to 0
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Suck it Harvard! :D
CreedCroud 3 months ago 24
In the comments: To. Much. Arguing. Its an "introduction to interest" -- math. Please, don't pull in religion. If you want to argue about religion, go to a religious based video. If you want to argue about math, stay here. But for goodness sakes, dont mix the two! There is a time and a place -- it is not here, not now.
Madidog123 3 months ago 9