Simple versus compound interest. So then after a year I would owe you 1000 plus 10 times 1000 and thats equal to 1100. In this case 100 would be the interest but it would still be 10.
From the base formula A P 1 rt derived from A P I and I Prt so A P I P Prt P 1 rt Note that rate r and time t should be in the same time units such as months or years.
This math video tutorial explains how to use the simple interest formula to solve word problems. Word problems on compound interest Our mission is to provide a free world-class education to anyone anywhere. T Time Period involved in months or years. Sal introduces a very special number in the world of math and beyond the constant eCreated by Sal KhanWatch the next lesson.