Calculations involving simple interest
ID:CVCISI

Video Overview

Interest is money paid for the use of borrowed money. Interest is paid by the borrower to compensate the lender for not having possession of that money. There are two types of interest rates. There is simple interest which is calculated on the principal amount, that is, the initial amount borrowed or invested. Then there is compound interest which is similar to the simple interest, however the difference is the total interest added is much larger. This tutorial is all about simple interest. We will look at the formulae and basic key terms to remember, after which we will work through an example.