Simple and Compound Interest
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Objective
I can calculate simple and compound interest and explain the difference between them.
Part 1 of 4
Warm-up video
Kayla Jones · 6:41
We don't generate video — this one is by Kayla Jones on YouTube. The practice questions and exit ticket below were drafted by AI for this objective, and every question is editable in the teacher guide.
Part 2 of 4
Key concepts
3 concepts
- 1
Simple interest grows in a linear fashion, adding the same amount every year, and can be represented by the equation y = mx + b.
- 2
Compound interest grows exponentially, multiplying by the same number every year, and is represented by the equation y = a(1 + percent)ˣ, where 'a' is the starting value.
- 3
To convert a percentage to a decimal, divide the percentage by 100; for example, 8% becomes 0.08.
Part 3 of 4
Practice
9 questions
What is the key difference between how simple interest and compound interest grow over time?
Explain how to convert a percentage into a decimal for use in compound interest calculations.
Part 4 of 4
Exit ticket
Quick comprehension check
“You invest $2,000 in an account that earns 5% interest compounded annually. Write the equation that represents the amount of money you will have in the account after x years.”
Sample answer included in the free materials
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Teacher guide, student handout, and slides — free, in Google Docs format
Teacher Guide
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