Understanding Simple Interest and Compound Interest

[@patrickjmt]

yes, i have students that watch these outside of class; it is the reason i started posting all of these videos in the first place. i wanted to my students to be able to go home and have a resource for when they are actually doing the problems

[@kenziebeynon7622]

Well you’re helping me 13 years later. I missed a week of grade 11 math and now this is how I’m getting caught up I’m gonna mail this test now Thankyou so much

[@jackrm8477]

Danggg long ago

[@lisakeith7810]

They’re lucky as can be to have you!

[@jadsmvs8651]

Thank you a lot. I have a police exam coming up and haven't done this since highschool. You taught me more about the processes and differences in one video than the public school system could in however many years. Cheers, mate.

[@brentwarren6788]

Love the comments at the end. Couldn't agree with you more. My love for mathematics has come to me at 50 years old and it's because of videos like yours. KZbin has enabled me to find teachers such as yourself who have the ability to teach and explain through the beauty of simplification. Thanks!

[@anushkagoyenka5565]

why some people always have the problem with others doing well to humanity .....here so many dislikes but for what i dont know ...patrick is a best person on you tube for maths as per me ...please respect the efforts of someone ... he is doing this all for ourself

[@angeln.7559]

anushka goyenka aww I love this comment so much. so wholesome. the world needs more people like this

[@davidhuynh5600]

They actually do teach this in elementary school now. However I don't remember learning this in school so I found it very helpful to not only help kids do their school work but also for me to be able to understand financial terms better. So much appreciated from many generations who have not been able to pass down financial wisdom to their kids. Thanks again I am subscribing in hopes to learn more.

[@ferrarif174]

Learned this the hard way.. THANKS SCHOOL LOANS!!!!!!!!!!!!!!

[@AlchemarTwitch]

You forgot to mention an extremely easier way to do compound interest. If you have $10,000 At 6% compound interest For 5 years You can do - 10,000 x 1.06 (to the power of 'years' in this case 5) So 10,000 x 1.06 (to the power 5) = $13,382

[@DatNinjaGuyD]

amazing

[@danzell2]

+AlchemarTwitch you cant do that mate because you have to take into account that the number changes year to year hense why you have to recalculate each compound individually....

[@shayanabdallah1372]

how did you get 1.06

[@prodcee1]

shayan abdallah you change 6% into a decimal which becomes 0.06 then you add it to the 100% which equals 1 so 1+0.06=1.06

[@dumbodumbo1956]

Chris39 boy Thank you🤓

[@haylenear1584]

This helped me a lot! My teacher had a hard time explaining this to me but you did in over 30 minutes this was so great!!!

[@isaacturnercreativeideas]

Thanks so much Patrick, I was gone for three days from illness and they learned this without me, without you I would have never understood this. Thanks!

[@BarzillaiBlue]

I can't believe it was this simple, my college course made it seem so much more difficult. ( '__ ' )

[@mobeatzz8245]

Barzillai Blue Exactly😂😂

[@Evangelionism]

How's college? Is it like high school (is it better, or just more old people telling you what to do)?

[@marissa954]

DJ Jaytoven its worse than high school..all teachers who said college is easier were lying..of course it also depends on the course u take..so yeah..good luck🙂

[@oo-gg6yo]

I am doing this in 8th grade...

[@aufadedicated4633]

exactly

[@gforceram]

I like how you used snowballing as an example at 12:14. this vid helped me a lot thanks

[@wakefieldyorkshire]

This is exactly what I wanted a basic understanding of compound interest without bs and a keep it simple approach. So thumbs up and thanks Patrick.

[@patrickjmt]

I try to keep most of my videos are straight forward as possible! Glad I could help

[@dilnatp6216]

Beеst РРРaydаy Loan sеrviсеeeе => twitter.com/3ac3041c00204e45d/status/809350192776347648 Understanding Simрleеe Interеееst and Comрound Intеrееееst

[@stanraulsebastian4448]

Gᴇᴛ PPPᴀʏᴅᴀʏ Lᴏᴀɴs Fᴀsᴛ ᴀᴛ: twitter.com/4a610960d85b11290/status/822777246943326208 Understaaаnding Simple Intеrееst аnd Cоoоmроund Interеееest

[@dylanjones7767]

THANK YOU PATRICK!!! I have a test tomorrow over this and I didn't understand compound interest AT ALL. You're a life saver.

[@leutrimh9925]

Where are you at now? Just courious :D

[@dylanjones7767]

@@leutrimh9925 god only knows

[@Dariachuu]

My exam is next week, if I pass... It will be because of you :) THANK YOU SIR... you win over my teacher anyday... he's a foreigner, cant pronounce most of numbers/equations very well. when he says principal... sounds like Prinsipyal with a strong accent or when he says compound interest, sounds like Kompand Iiiinterest... you get the point :D haha so thank you so much!

[@aygamer1238]

The only video out there that is not made by an Indian :'D

[@halimasnm5411]

Ahmed Yasser Gonnah 😂😂

[@50FILSWILD]

He Could but he also stated that this video is just to clarify the basic things about interest and how it is counted. The following video will explain the formula. Trust me on this.. This is my 1000th patrick's video I've watched.

[@kerwinchadrick]

THANK YOU THANK YOU THANK YOU A BILLION TIMESS!!! YOU SAVED ME! YOU TEACH WAYY BETTER THAN MY NORMAL TEACHER,I DON'T UNDERSTAND ANY THIING HE SAYS THANK YOU ONCE AGAIN,I WISH YOU WERE MY PERSONAL TUTOR :D

[@matthewchang2905]

Schools In the uk teach this from the ages of 12+. Got it on my gcse paper so it was useful to learn^.^

[@angelaleones]

my pre calc teacher in college does not know how to teach, so i got to your vids for help, thank you!

[@samarthtandale9121]

Great video to build the fundamental concept 🎉

[@NoluthandoBoyce]

Very very helpful, you're a genius for making this so simple while everyone else made it difficult

[@thenvironmentalist]

Was reading The Wealthy Barber, made me want to review the math on compound interest. Thanks man

[@Exiburz]

Thanks for this, turns out this is actually really simple. I suck at reading through my textbook and taking in information from it, so it is so much easier when someone can explain it to me through spoken words. They seem to stick a lot more, and now my textbook makes complete sense

[@K8TF]

This is explained very well, especially when he used (1.06) rather than using the long method. Nice job!

[@thepatshowonwp]

Thank you for the vid, it helped to simplify for me an assignment I got for this weekend and I agree with you one hundred percent, it IS a shame this is not taught in elementary schools. You're a good man and a smart one!

[@legostopmation123]

Thanks for the tutorial. Now that I understand the basics of interest I can commit insurance fraud no problem :)

[@TheMadJake]

I have my maths gcse in england tomorrow, just watched this and it helped me really figure out the deterrence between the two,thankyou very much, great video!

[@patrickjmt]

@thepatshowonwp thanks for the kind words. and i am less smart, it's more about being studious and hard working

[@caseyrenee377]

Thank you so much for this!!! I'm taking an online class for college. And my teacher just collects money for doing nothing. My book was confusing me. But you helped me a lot! Thanks!

[@lionheartaslan394]

DUDE YOUR THE MOST AWESOME ACCOUNTANT TUTOR EVER!!!

[@pritomdey6745]

Thnx man!!! This really helped you explained it better than my maths teacher! Keep up the good work.

[@jackwebster400]

Just a quick tip. I am not sure if all calculators have this. But some do, a simple way to do the compound equation is to do 1.06^5 (to the power of 5) x 10,000. This will give you the same answer Patrick got in the end. Just in case anyone was wondering. Thanks for the video though, it helped.

[@MarianaGarcia-dl8pc]

Thank you! It really simplified the whole concept of compound interest. I had an easier time understanding it.

[@pablopicado9545]

Simple: Original deposit + (original deposit * interest * time) = 10,000 + (10,000 * 0.06 * 5 years) = 13,000 Compound : Original deposit *( 1 + interest) ^ time = 10,000 * (1.06) ^ 5 years = 13,382.26 Here are the equations simplified. You just substitute in the values and you're good to go. Also the ^ symbol meant "raised to the power of..." meaning it's an exponent and the * symbol means "times by" so multiplication. If it's not annually then the equation won't work; it will need to be modified to work with weeks, months, etc.... Hope this helps even more

[@TorontoSP15]

Thank you; thank you; thank you! That was a great explanation. Studying for a finance test and I was having a challenge wrapping my head around the fundamental difference.

[@lifeisfun_n_diy1254]

Thank you so much for sharing your knowledge my teacher at school can't explain at all u made it so easy to follow and my doubts are totally cleared thanx to u

[@shadaflorida]

M = P( 1 + i )n M is the final amount including the principal. P is the principal amount. i is the rate of interest per year. n is the number of years invested. This is an easier way to do it!!!! Great Job anyway!! I love your videos!

[@TREYARCHsucksDICK]

were doing this in my honors calc class, and this shit is just BLOWING MY MIND.

[@patrickjmt]

any SAT study guide should help... they all cover the same stuff. some have more review/less actual tests, some books are more practice tests/less review. just depends on what u feel like u need

[@AlexFoeShizzle]

You make more sense than all the teachers in my school combined....

[@NafeBanda]

Exactly 💯😂 it's a shame they don't teach us in the beginning... anyway thanks alot it's now finally understood

[@Frozenmemory1]

wow! your this video is very useful, now i finally get what is compound interest and simple interest. Thank you

[@StrictlyBizniz15]

Thanks alot It helped me soooo much on my tests and homeworks God bless

[@caughtly]

This clears up simple and compound interest for me so much! Thank you!

[@NicolaHynes]

I have an exam tomorrow and this has really helped me out! Thanks

[@awesome5343]

I was taught. B= P (1+R). [small'T to show to times power]. What to do on calculator E.G. Find the compound interest $927 with 9% interest for 4 years Do : 1.09 to 4th power ( on calculator by typing in 1.09 [hit times button ] [hit equal button 3 times (it should always be one time less than the power)] and then multiply by 927

[@diustistalin5657]

thank you so much i have a maths exam and i didnt quite understand how to do compound interest its really helped me thank u so much as he is explaining slowly i understood :)

[@alanna4858]

This is an excellent series. Thank you for these. I am 23 and still have big problems with math. do you find that your own students watch these videos and make use of them outside the classroom? I am hoping to become a teacher although something tells me Social Sciences or English would be a problem to do over KZbin LOL. Thanks again. Excellent and useful.

[@potterhead09034]

Thanks! This really helped a lot. :) I have a test on this tomorrow and I had no idea what I was doing before i saw this. :p

[@femboost]

You, sir, are a gentleman and a scholar. Thank you for the helpful videos!

[@angelmoore9726]

Some of you are so petty. Just looking for something to criticize. The video either helped or not. If you are going to waste your time critiquing at least make it useful and intelligent. Thanks for taking the time to share this information Patrick.

[@patrickjmt]

happy to help!

[@DelilahStrangex]

Thanks for this tutoring. I'm watching it for my Math Applications class were we are learning about this :D

[@pamiam2u2]

Great job! Very informative

[@user-ww6ii6zn8m]

Awesome video! Compound interest is so important for achieving long term wealth!

[@TyFrederick]

you're the reason I have my high school diploma. thank you.

[@BlackxBanBan]

Thanks!! this helped me a lot for my final exam T_T bless you hooman

[@ELLIOT8209]

Thank you. Simple and rewarding explanation

[@B1752]

in 9:11 why did you ada [1+0.6] I don't get the 1

[@jessecolomb1345]

because its the whole number (10,600) + the interest of 6%

[@airtel1730]

bernhard.s.s : Bro , u see that in this bracket I.e. { 10,600 + 0.6( 10,600 ) } ..... 10,600 is common so we take it out from bracket and we get {1+0.6} .........

[@ivania1234567]

I don’t get it why you add 1? Can you guys explain me better please 😱

[@gusti1021]

1 is 100% and 0.06 is 6% (you need to convert % to decimals). If you invest $10,000 (100%) and you earn 6% ($600, that's 0.06x$10,000) then you need to add that to the 100% that you invested, so it becomes 1+0.06 or 106% (100%+6%), which is $10,600 ($10,000+$600). I hope it helped you.

[@halimasnm5411]

Martin M thankyou

[@MetaphysicalMike]

This was extremely helpful thank you very much for uploading this Patrick I am taking a finance class right now at Penn State Abington

[@tobyplayzzz9654]

Got a maths test today and this helped, thanks

[@bedroomjedi]

Thank you, you have helped myself and my daughter!

[@SackRingDice]

This tutorial saved my life.

[@mclvstac]

the way my teacher taught us with compound interest was like so: (using your compound interest example): 10,000 x 1.06(to the power of) 5 = your answer. the .06 is the interest rate, and to the power of 5 is the number of years. just put the 1 in front of your percentage decimal and it works with anything.. in my opinion this way is a lot quicker and easier. Great video tho! take care

[@Raeb222]

Thank you very helpful Do you have more ? ( how to videos, car payments other loans?)

[@mrflynfresh]

The simple interest method is usual a one-time investment. The compound interest method you should have a initial investment and make re-occuring deposits into that investment monthly, quarterly, or annually...

[@marinamarcucci3923]

I agree with you Mr. Patrick, they really should teach it in elementary because I a 23 and in a "quantitive reasoning" math class, and half the time I have no Idea what is going on when they start talkig about things like this

[@danzell2]

+Marina Marcucci they will never teach this in schools because they do not want it to be public knowledge.... oppression

[@marinamarcucci3923]

I am sure that has nothing to do with it, but okay. To each their own.

[@joshmo1672]

That's great info, the only problem is finding a market that shells out more than .7% interest these days.

[@jaliyahcharleston128]

Thank you so much! This helped me so much! I finally understand this.

[@greggates2608]

Thank you so much it helped me to understand this chapter in the common core book

[@markizmendez6431]

Really, Man, Thank you a lot, now I understand than it was with my teacher

[@patrickjmt]

glad to help : )

[@seefany]

Well explained! Help with me a lot! Thanks!

[@jcsace13]

the 1 in 1.06 represents one year. the 0.6 represents your APR of 6%. since your interest is earning interest, each progressing year end balance multiplies itself with 1.06. If your APR were to be 9% then it would be 1.09.

[@patrickjmt]

glad i could help :)

[@vikramdantuluri4745]

@patrickJMT TYSM This makes much more sense now

[@caitlinx54]

So what formula would you use to find the compounding interest easier ?

[@iamniravkumarpatel]

Thanks I had a test this week and it helped me a lot. If there’s a way I can become a patreon for this channel it will be great for me.

[@patrickjmt]

you can find my channel 'patrickjmt' on patreon! there is also a link on the 'about' section of my youtube home page. thanks a bunch!!

[@lysajoseph376]

HELLO i just wanna say your videos are the best i ever came across and i was wondering if u have anything on annuities for financial maths

[@joanamorais606]

Thank you very much but what is the difference btwn simple and compound interest?

[@fizzazaidi117]

Simple interest is calculated by multiplying the loan amount (e.g. $1000) by the interest rate (e.g. 5%) by the number of payment periods over the life of the loan (e.g. 24 months). Compound interest relates to charges the borrower must pay not just on the principal amount borrowed, as in simple interest, but also on any interest outstanding at that point in time. I FOUND A FELLOW CTE FAN!!!

[@joanamorais606]

Fizza Zaidi Oh ok just trying to make sure!! You like CTE as well??????? i love em they are the bomb!!!!!!!!!!!!!!!!!!!!!!!! :D

[@fizzazaidi117]

IKR INITIATION MUSIC VIDEO CAME OUT TODAY!! Joana Morais

[@Marvipanh]

Thnku thnku very good way to explained very nice I can easily understand nd u solving my problem thnku so much...

[@scorpiojudo]

I'm gonna do my SATs pretty soon, any advice on what books to get so that I can study from? I've been out of high school since 1997 so yeah it's been quite a while. I was ok with maths back in High School, but math is something I have to do everyday in order to remember the formulas. Honestly I need to redo everything. Your vids help alot, but a swift reply would embolden me to make an immediate purchase! thanks

[@femkunmi]

Thanks,Pat but suppose you know the A and P and N how do you find interest rate after 4yrs

[@seefany]

Where are we able to find more of your videos on "Financial" topic?

[@masvas1]

Your video was so helpful. Thank you for making it.

[@Sam8mate]

can you use the rule I=PRT? which is interest equals Principal,Rate,Time

[@lamtartarus]

thats for simple interest, yes.

[@DrBrianMcNamara]

If I were to add money to a savings account which is getting compound interest, would I get interest on that too?

[@kodyraphael6078]

this was really helpful man! thanks! may I ask what the 1 was for? is that the time ?

[@arsiiicola]

this one helps me a lot! thanks man!

[@maximalliantt.katjimune738]

very nice and straight to the point thanks

[@Theoneandonlycleez]

for compound you can do 1000x1.06^5 and it will equal the same

[@DALEROSALI]

could u show us the easiest way? cause in exam it takes quiet a long time to calculate year by year.

[@AIONBERSERKER]

The easiest way to find compound interest is this: New Amount = Initial Amount x (1+n/100)^n The above equation is simpler than it looks it essentially means: The new amount is equal to the initial amount MULTIPLIED by 1 PLUS n (n here is the percentage per year) DIVIDED by 100 (the percentage increase n is being divided by 100 to give us a decimal) RAISED TO THE POWER of n (n here is the amount of time the interest is gained for. Here's an example: if we save £20,000 and earn 5% compound interest for 10 years we would do this. New Amount = £20,000(1+5/100)^10 which would give us an answer of £32,577.90 to the nearest 1 d.p

[@ReplayKCF]

ok what im wondering is lets say i start saving money now and i put 30 dollars in a savings account and slowly add money to it unil I reach 1000 dollars till the end of the year will the interest be calculated upon the initial (principal) 30 dollars or will i get an interest of the 1000 dollars? what if I have 0 dollars in the savings account for the whole year but put in 5000 dollars on the 31th of December?

[@patrickhoughton7463]

I have a question about one problem i had to do. It said, "Jake earns about $18 an hour, and he received a raise of 3.2% and then 4.8%. How much will he be earning now?" I wasn't too sure about this one so i did compound instead of simple interest, so i was wondering which way was actually correct?

[@1800CurlGirl]

You saved my ass on the School Certificate :D Thank you so much!

[@husenkuliev157]

Hello, when you are reading the question, how can you distinguish the difference between what is asked (compound or simple)

[@cfarinho]

5 times 600 it's 3000, i think, but it is a very interesting point indeed: compounded interest. it makes for something we humans cannot really grasp; exponential growth. and it questions the wisdom of the dogma of perpetual economic growth.

[@empireoats]

Thanks! Great starting video for a quick explanation!

[@ibrahimhelal4456]

we can use this formula to calculate the compounded interest rate S=P(1+i)* where (S) is the total amount (i) is the interest rate and (*) is the power which is the number of years

[@namratakapoor5981]

ibrahim helal He made this video to show the difference between and explain SI and CI, understanding the formulas is better than cramming them.

[@ilikeshroomgals]

good job practical math for the world excellent video!!!