Simple and Compound Interest | Formulae, depreciation, annuities

Welcome to Day 13 of the 50 Days of Tutelage series. Whether you are dealing with banking, investments, or standard algebra exams, understanding how interest accumulates is essential. This lesson breaks down the formulas for both simple and compound interest and explores why their growth curves look so different. We walk through the core concepts in a simple, step-by-step flow: • The Core Variables: Defining the fundamental components used in financial math: Principal (P), Rate (R or r), Time (T or t), and Amount (A). • Simple Interest (I = \frac{PRT}{100}): Understanding linear growth, where interest is calculated strictly on the initial principal amount only. The interest earned remains constant every single period. • Compound Interest (A = P(1 + r)^n): Understanding exponential growth, where interest is earned on both the initial principal and the accumulated interest from previous periods ("interest on interest"). • Compounding Periods: Looking at how changing the frequency of compounding (annually, semi-annually, quarterly) impacts the final accumulated amount. #Mathematics #SimpleInterest #Compound Interest #FinancialMath #Algebra #STEM #50DaysOfTutelage