Introduction to interest | Interest and debt | Finance & Capital Markets | Khan Academy
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- Опубліковано 21 кві 2008
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What interest is. Simple versus compound interest. Created by Sal Khan.
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Finance and capital markets on Khan Academy: This is a good introduction to the basic concept of interest. We will warn you that it is an older video so Sal's sound and handwriting weren't quite up to snuff then.
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"Rent on money" This is the best definition I have ever heard about "interest"
dude same!
are you rich from now?
@@xamantiwari 😂
Taking the first step is the hardest, but 7 house later living off passive income since June 6, 2016. You’ve got to start taking steps to achieve your goal.
I really want to start something for myself but the problem has always been not knowing where to start. What kind of investment would you advise? And what is the best way to follow it?
Thanks for your response but how do I get access to your financial consultant? Can you share more info about him if you don’t mind.
You can make a quick internet research with his name *JACKSON STEN MARSH*. The rest of the information is there for you to read and get in touch.
Wow!!! I know and I have been growing with him since 2018. His expertise has been the best for my financial journey. I havpe created a passive income over the years and life feels really better and easy for me. I feel so delighted to read these good reviews about him
That's a good decision if you start now. I invested in
Stocks or Gold coins with the help of a Fin. consultant and was able to buy my second house last year September and hope to buy more if things keep going smoothly for me.
When you said, "Rent on money" I was like hands down one of the best definition
They call it interest because people have no interest in loaning money for nothing. But the idea of receiving money on top of the money that they loaned makes the offer much more interesting.
interesting
interesting
Im not a native speaker and i took your comment seriously for way to many seconds.
Tell that to those lending money with negative interest rates.
u stupid
Thank you so much! I owe you a big part of my studies! Whenever I do not understand economics, statistics, math of finance, you are the one who helps me understand. So I wanted to say thank you!! You are an amazing Professor! Again very very thankful! :)
:)))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))
There's a formula for simple interest: A=P(1+it) You learn this for the Actuarial FM Exam. A is amount value, P is the principal, i is the interest rate, and t is time. Compound would be A=P(1+i)^t
Khan Academy is like making a school from "for Dummies" books... which is extremely effective, logical, and interesting. He makes education more personal.
This is the best adult education I have ever imagined could help adults looking for classes regarding our interest in banking and purchasing a home.
This would help me a lot before I start a finance and economics course
Such a clear way of explaining a basic concept that is often over complicated. Thank you.
i swear this is how i had explained to myself, 'rent on money'! im 32 years old noob in finance...thats why sal hits the mark for even the uninitiated!
Thank you so much! 👏🏻👏🏻👏🏻 it’s really good lessons you are providing here without putting fees and that’s such a huge thing these days ☹️ many thanks 🙏🏻 even big professors can’t do what you’re doing. Really grateful ✨
Same. Better explanation then the professor in our school who get payed for bad explanation
Good gracious, where did to the 3rd power stuff come from. Lost me with compound interest
I hear clearly, and after watching all of his videos up to this point in order, it completely makes sense that he would say that. Watch the series on compound interest and the number e and you'll see as well that it's true. If you don't I don't expect you to be arguing anymore since you would be arguing with lack of knowledge.
I am thankful to Khan academy. keep up your great work.
Sal, don't ever forget that you are the man!!!
Its been 12 years, but still the best
Sal is a gift to humanity.
Thanks for clarifying what compound interest is exactly.
this is the first time ive ever seen something educational on the education section on the youtube home
Very informative video! Very helpful lessons!
You could also teach it to people at Wells Fargo. I had a friend who dropped them cold over 5 years ago because she thought they were "the worst financial institution ever." She withdrew everything and told everyone who would listen about how they were the worst financial institution ever.
Anyone who plans on getting a loan should watch this. Very nice.
You rock! Thanks a lot! 10 minutes and it nailed me!
👍
Thanks for this! Great video!
Rent on Money this the Best defination
heyyyyy great viddd! i LAV it to teach me all these n3w things!
Hello I stumbled upon this video when I was looking for your Share market and Stock and Options related videos, I could not find them anywhere on the channel . Can you help me locate the course or playlist. Thanks,
Nice video. Very well explained.
He teaches me more in 9 minutes than my teacher in a whole week and I think you for that
Thank*
then you have a preety bad teacher iguess
@@bobpop_2520 Even my math teacher barely help me understand mad compare to my college semester professor, that is telling lol
Actually I believe he did say "now you've learned" I think he was referring to the Binomial Theorem. Look at his Pre-Calculus playlist, this is video 17 out of 44 in the playlist.
wow~ it's been 9 months already. Thanks!!
i can sense the gen z humor from a millennial
A 2 month reply on a 8 year old comment, somethings coming I can feel it
We never left
Well done!
Thanks very much!
Is this whereI would start to learn about finance in general? I know there are several finance-related playlists.
He did say and now you've learned and he was referring to the compound interest and the number e series.
your the best!!
If you are referring to 5:45 no. This is what you owe overall. 1st year- $110 2nd year- $120 etc. You do not pay that at the end of the year, that's how much you owe. Your principal is multiplied by .1 every year (which is the interest rate, 10%) until you pay the principal.
Do you have a touchscreen or are you just that good writing and drawing with your mouse? I notice you are using ms paint. anywhoo great stuff mate, keep it up and thanks!
Great video :)
How can you know so much Mr. Khan, thank you for the great explanations
ikr, he covers every subject in school and uni, he is like 1 teacher university...
Lol actually hes one of the OG youtubers
Legend are watching in 2022💥
Is there any tutorial about Project Feasibility Test Analysis?
I'd like to hear Sal's comments on the financial info in the Zeitgeist films.....
because every year you get 10% interest, meaning the final total of every year is 110/100 which 1.1.
So with your principal at 100, with 10% interest in mind it is 110/100 x 100 = 110. For the second year you can either calculate it by 110/100 x 110 or (110/100)^2 x 100
This stuff is simple, BUT I have one question to ask for an answer. At 7:41 he changed it from 110 + 10%(110) to 110(1.1), where does that 1.1 come from?
There shouldn't be a "$" sign when calculating the interest rate. It should just be 10% instead of $10%
This guy is awesome
👍Good Video
IS THIS PLAYLIST IN RIGHT SEQUENCE?
It feels like it contains videos from different playlists, i am willing to take on this course. Any input would be appreciable.
OMFG ... we spend like 2x1hour lectrue on this.
and did not make any sense at all.
yet you spend 10mins and I totally got it...
This was so informative thank you
For me, the problem with trying to learn by watching videos like this is that I really lose the chain of thought when the person teaching something keeps going like: "t-the.. the.. now, er... the..." and things like that.
But that's a pet peeve
of mine
Everyone learns differently, his crude drawings and writing are hard to read, but for someone that learns through demonstration, I find video pretty informative if only watch it and listen closely to what he explains, depends on your learning disability with translating what learning method they use to explain how to do it.
Well done;
very helpful
in simple interest rate, after each year it should be 110 dollars. same because principle is same and interest is also same
thanks a lot
Interest-ing!
>_
Hellsconsort honestly I found this funny
@@tenzinpalmooo3924 Meh too
Not funny but u tried and I appreciate it(This is my opinion)
thanks youre awesome
I wished sal would have used a new car loan as an example. Most car loans use simple interest thus making the illustration more practical. In his example sal is assuming the principle doesnt change, someone borrows $100 @ 10% interest and waiting x number of years to pay it back. No one does this most people will make subsequent payments over time thus reducing the principle.
I'm curious how the method 100(1.1)^10 would work of it was months instead of years
But very helpful.
THX :)
Please tell me what was the video before this video. You started this video by saying "well now you've learned what i think is quite possibly on of the most useful concepts in life, and you might already be familiar with it, but if you're not this will hopefully keep you from one day filing for bankruptcy" WHAT IS IT?!?!?! ANYONE, PLEASE! THANK YOU VERY MUCH!
good presentation
A better explanation of interest. It is extra that you have to pay to match the money's value with what it will be as money loses it's ability to purchase over time. We see this in economics where milk may be only 50 cents in the 60s and is now 2-3 dollars. This is called inflation. When i give someone money, and they give me the same amount back, i lose out on what i receive, i've gotten less money because i can buy less stuff with it. To compensate for that loss, we use interest.
Excuse me but what program are you using to draw?
My god! I can't draw a straight line with my mouse, how the hell does he write with it!
Probably uses a drawing pad. Are you still alive btw?
@Luh VA RIP Kamel . K . That's a good question, not sure if they did have drawing tablets existed in 2012 but I do remember having a P.DA at that time lol.
yo you alive?
@@xxtherealnubxx yea they should be they posted a video 4 days ago
He is using a graphic tablet with a stylus
Yea I'm kind of unsure about the 1.1 also
0.1 is equal to 10 percent but if we just use 0.1 you're going to get just 10 percent of 100 (which is 10) we want 100 + 10 percent of 100 so we add 1 to 0.1 to get 1.1
@@theTeamSlayer353 Thank you!
but why am i taught to use i=prt instead? with that formula we would jist compute the actual money with the interest... then we wouldnt really be getting the interest unless we subtract it to the principal money, right? but if we really want to get the interest asap we should just use i=prt. then again when looking for the actual money with its interest, we can use p(1+tr).
The playlist is endless.😐
bro who is this guy i’ve hear his voice like everywhere in the learning area
Khan, the CEO of Khan academy
Salman
Note at 2:31 he writes 10/100 = $ 10%
Thanks.
The notion that people think it's intelligent to argue about these things isn't even close to logical.
who is here in 2020?
I'm watching this because of the negative interest rates floating around which after watching this video, I am more certain that our financial lenders have gone mad.
Negative interest is a useful tool for artificially stimulating the economy, which is hardly something new when it comes to keynesians. What you should actually be worried about is the systemic problems that have forced countries to take such drastic actions in the first place.
Interest to match the amount that we lost or more then the amount we lost to gain a profit. What this does is give us the incentive to let others borrow our money and delay our own consumption in hopes of being able to buy more in the future. If i lose money and i can't buy the game i wanted until next year, i will not be willing to lend someone the money.
i have a small inventory of bonds for sale.....do you have suggestions on how to find buyers?
@NoughNeaux Each year you pay 10% of interest on the NEW balance. So in year one you owe $100 + 10% which is $100 * 1.1 = $110 (since you owe the principal loan and interest). The reason he squares 1.1 is because he is trying to shorten the expression. For instance, in year 4 you would owe...$100 x 1.1 x1.1 x1.1 x1.1 = $146. But instead you can shorten that expression to $100 (1.1) to the power of 4. Since there are four 1.1's
MSc. Accounting Vs Finance: Which Should You Study?
@MrDevin666 1.1 is the same as 10% interest rate on top of your initial investment which is 100%, 110% is equal to 1.1.
Just in case. Is interest and interest rate the same thing?
@iNinjaNotes Yeah thanks for the reply, but I got it. He said that you undistribute the 110, which made no sense, he meant factor out 110.
Haha I kept thinking UA-cam was messed up with that Harvard video being on the home page.
Whos watching this in 2017
Yupp, 240p sucks even now!
Is my answers are true or false
nope 2018
2033 here
nope 2019 here sorry
I have two questions, can somebody give me an idea please? suppose we have two companies in an industry i.e. 1) ABC 2) DEF. Let's say we have financial reports of both companies for 5 years. For each company i can find all the ratios for every year separately. suppose we are going to find a specific ratio i.e. liquidity ratio of both companies.
Now my questions are: 1) How to find combined liquidity ratio for company ABC for 5 years?
2) How we can calculate combined liquidity ratio of both (industry) companies (ABC and DEF)?
whatis agreat explations.
where did 1.1 come from? how did the equation 110 + 10%(110) turn into 100(1.1)2= $121 ? answer me
Thanks Khan Academy ❤️
2018: wohoo
same in february
2020:who?
@@ashka6725 me
@@ashka6725 and another one :D
@RealFngDeal Well said.
This is just funny how people think that we in Estonia are not very smart xD But now I can tell you ... If you didn`t know this you are actually not very smart, And that´s the truth :)
GOOD
Is there a quicker way to learn this.
Hooray! The Harvard video is gone!
@RealFngDeal Of course I believe in what I want, don't you ? I for one choose to believe in something that has enough proof to sustain it's argument.
Which is why we call it "faith" and not logic, unlike the big bang theory.
what about tax on the buying