To use the simple or compound interest formula, first determine what is asked. Write down the information given to you, to determine which formula to use.
Meagan Diedericks
206036345
Greeting and introduction
Good Morning and welcome our Mathematics class for today.
Today's topic is all about money, Finance and Growth, we will be looking at simple and compound interest.
Money and finance are part of the world. For example, you may want to invest your money (pocket money), and earn interest or you may want to borrow money from someone or even from the bank, who will charge you interest on the amount borrowed. If you borrow money from a bank, than you can expect to pay interest on the loan. Interest is charged at a percentage of the money owed over the period of time it takes to pay back the loan. This means the longer the loan exists, the more interest will have to be paid on it.
The two type of interest are shown:
Simple Interest
Simple interest is interest calculated only on the initial amount that you invested.
The general formula for calculating simple interest is:
A = P(1 + in)
Where: A = accumulated amount (final)
P = Principal amount (initial)
i = interest written as decimal
n = number of years
The simple interest formula is used to find pieces of missing information.
Compound Interest
Compound interest allows interest to be earned on interest. While simple interest, only the original investment earns interest, but with compound interest, the original investment and the interest earned on it. Therefore compound interest is the interest earned on the principal amount and on its accumulated interest.
The general formula for calculating compound interest is:
A = P(1 + i)n
Where: A = accumulated amount (final)
P = Principal amount (initial)
i = interest written as decimal
n = number of years
NB: After this lesson you will be able to apply the information given to determine the unknown by using either the simple interest formula or the compound interest formula.
Use the link below for more details on when and how to use the simple interest and compound interest formula.
Click on the links below and watch the videos to assist you in completing the task on simple and compound interest.
Also use the link below to the website for more information.
https://intl.siyavula.com/read/maths/grade10/financeandgrowth
Questions
Questions 
Variable mark 
Formula mark 
Total 
1 
1 
1 
2 
2 
1 
3 
4 
3 
1 
3 
4 
4 
1 
3 
4 
5 
2 
4 
6 



20 
Total Mark: 20 Marks
In this lesson it was proven when to use the simple interest formula and what to use the compound interest formula.
We applied both formula to calculate interest.
We can identify situation where the formulas can be used.
We will continue with simple and compound interest in our next session, but Inflation and population growth will be introduced.
Watch the video below in preparation for the next session.
Use the link to learn more about Finance and Growth.
To use the simple or compound interest formula, first determine what is asked. Write down the information given to you, to determine which formula to use.
Meagan Diedericks
206036345