Episode 16 — Finance Growth and Decay

Compound Interest

Learners will be able to:

• Identify the formula for compound interest as A = p × (1 + i) ^ n. • Calculate the decimal value of the nominal interest rate when compounding is semi-annual. • Substitute values into the compound interest formula, including p, i, and n. • Use a calculator to work out the accumulated amount using the compound interest formula. • Determine the interest received by subtracting the initial investment from the accumulated amount.