Introduction to compound interest and e | Algebra II | Khan Academy

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  • Опубліковано 21 кві 2008
  • Compounding interest multiple times a year.
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КОМЕНТАРІ • 89

  • @mctooch
    @mctooch 7 років тому +9

    My friend,
    With a degree in finance from a prestigious midwestern business school, I am rather embarrassed to admit that... Prepayment penalties had not made immediate, intuitive sense to me. I knew that a lender would unexpectedly be forced to attempt to find a new borrower (which I had always understood, to a certain extent, to be a undesirable consequence of prepayment); however, in the example you've so generously taken the time to produce for the masses, you explain how the lender would permit a 6 month loan at half the 12mo interest rate with a caveat: should borrower then require the full 12 months... Lender would permit REBORROWING at the same 6mo rate. At this, the lights finally turned fully on and my brain lit up... finally, after all these years getting it! And I owe it all to the Khan academy for these amazingly brilliant yet simple instructional videos! Thank you, Sal. Thank you so much.

  • @thatonedude3312
    @thatonedude3312 6 років тому +33

    the video quality makes me want to cry

  • @neettim
    @neettim 11 років тому +6

    He said, it's basically like this: (1.085 + (.085*1.085)). So if you factor out the 1.085 it looks like: (1.085)(1 + .085). Simplify that and it's (1.085)(1.085), which is (1.085)^2. This continues as each month passes and the exponent changes.

  • @thesharanaithal
    @thesharanaithal 8 років тому +33

    "I hope it makes cents to you." ba dum

  • @JBarAUS
    @JBarAUS 16 років тому +3

    Nice video - you have a good way of explaining things. Cheers.

  • @MisterTutor2010
    @MisterTutor2010 5 років тому +5

    Sal would definitely make a good loan shark name :)

  • @bryceburckart4808
    @bryceburckart4808 7 років тому +6

    Here's his updated video:
    www.khanacademy.org/math/algebra2/exponential-and-logarithmic-functions/e-and-the-natural-logarithm/v/e-through-compound-interest
    This makes more sense.

  • @ChrisDaTroll
    @ChrisDaTroll 10 років тому +4

    i like how he is using a calculator

  • @TehBKudder
    @TehBKudder 10 років тому +1

    Thanks, been trying to find that connection for a bit here.

  • @BuffLogy14
    @BuffLogy14 10 років тому +3

    Not trying to be negative here! But is it just me but the writing is pixeled and sorta hard to read?

  • @a7thd
    @a7thd 14 років тому +1

    is there some books of this subject (basic math fin) ?

  • @x2thebox
    @x2thebox 12 років тому +1

    @jeepnypitpits He got the example problem mixed up. If you borrow at half the rate (50%) for half as long, you'd get 1.25, given you only compound interest once. I haven't seen the video with exponents, logs, ln, and e yet, gonna have to check it out. I recommend you do the same. Cheers

  • @Phagocytosis
    @Phagocytosis 11 років тому +3

    Nonsense, you can benefit humanity in other ways and even if you can't, that doesn't mean you should die.

  • @doc14azsx
    @doc14azsx 11 років тому

    what playlist is this in??

  • @Phagocytosis
    @Phagocytosis 11 років тому +5

    I love math, hate cooking though. What's with the "go die"? Seems like a slight overreaction.

  • @Wrongback
    @Wrongback 10 років тому +6

    i feel like he was trolling towards the end

  • @Seemabuckshee
    @Seemabuckshee 11 років тому

    @DadizTV use the Formula.
    Amt=P (1 + r/100)^2
    THerefore, 2500=2000 (1 + r/100)^25/10 or 2.5
    :: 2500 - 2000 = (1 + r/100)^2.5..so on.i think

  • @yonimulugeta1378
    @yonimulugeta1378 Рік тому

    when you do the example the time period should be converted in to a year when you do a simple intrest

  • @MyLegsAreKindaLong
    @MyLegsAreKindaLong Рік тому

    Top tier caculator.

  • @agirl3517
    @agirl3517 3 роки тому +1

    10:02 should be (1.0027)³⁶⁵

  • @fy-
    @fy- 11 років тому +1

    * 1.0027^365

  • @Plantsandtoyhorses
    @Plantsandtoyhorses 12 років тому

    wow, glad I only borrowed ONE dollar! ;) and by the way what time period is semi-annually considered? If its 2 that you would divide the interest rate with, is that in months? Because wouldn't a year be 12?

  • @MistaFranko
    @MistaFranko 13 років тому +5

    Sal, i need a Dollar

  • @akifabidi1744
    @akifabidi1744 6 років тому +1

    Dang, its been 10 years

  • @fireorfrog
    @fireorfrog 5 років тому

    Let's make math fun! ...by using a hypothetical loan interest percentages negotiation.

  • @Slapshot934
    @Slapshot934 11 років тому

    I am doing an assignment on compound interest in math, and I have to answer this question: What is the theory? What does it state? (Postulates, fundamental concepts, etc…). Any ideas on how I could answer both of these?

  • @afreakenracoon
    @afreakenracoon 14 років тому

    HELP!!!
    a car was bought for 25000$, each year it depreciates by 15%...
    a) write an exponential formula that demostrates the cars value in (n) amount of years after it was purchased/
    b) what is the cars value at the end of 3 years
    c) after how many years will the value of the car be half of the original price?
    PLZ HELP!!!! THANK YOU!!!

  • @ChewieChopSuey
    @ChewieChopSuey 9 років тому +15

    Not the best khan video...sadly

  • @DadizTV
    @DadizTV 11 років тому +1

    "Find the interest rate (in % p.a.) compounded monthly necessary for $ 20000
    to accrue to $ 25000 in 2 ½ years."
    can any one just tell me how to solve this my mind is fucked

  • @samuelemorreale7510
    @samuelemorreale7510 4 роки тому

    Isn't 100% interest rate illegal?

  • @NillyLilly123
    @NillyLilly123 11 років тому

    What. The. Fucking. Goodness.

  • @Anoldaccount988
    @Anoldaccount988 10 років тому +7

    Feed my kids with a dollar? ROFL. I guess the setting is back in the day.

  • @Phagocytosis
    @Phagocytosis 11 років тому

    Just another example of the blatant advantage being taken of the customers of Sal, the evil loan shark.

  • @Wolven531
    @Wolven531 14 років тому

    @bittul completely right, xD

  • @147andymc
    @147andymc 11 років тому +1

    no...

  • @Djcrazykidd
    @Djcrazykidd 14 років тому

    @afreakenracoon I'd chose "A" , but thats me

  • @anushkabhandari9508
    @anushkabhandari9508 2 роки тому

    50

  • @redfish3455
    @redfish3455 5 років тому

    10:05 don't let your phone interrupt like that!!!!

  • @anushkabhandari9508
    @anushkabhandari9508 2 роки тому

    0.2739

  • @carlosg5905
    @carlosg5905 7 років тому

    Does this only work when the original principal is $1?

  • @HexxuSz
    @HexxuSz 10 років тому

    hop mash

  • @keddyking
    @keddyking 13 років тому

    100/12 - 8.333333

  • @rax7
    @rax7 15 років тому

    why not just simply use 10% per month instead of 8.5%? this should make it simple.

  • @HexxuSz
    @HexxuSz 10 років тому

    finances

  • @Sutto3721
    @Sutto3721 11 років тому +1

    I feed my children with one dollar....XD

  • @mhhsracists7806
    @mhhsracists7806 4 роки тому

    1 == 100,000

  • @jacobjohnson8686
    @jacobjohnson8686 3 роки тому

    So... I spent 10 minutes and 11 seconds of my life watching stuff I already know, with the belief that I was to be introduced to the number e in this video, only for it to end without any mention of e? Why is it even in the title?!

  • @play.through
    @play.through 12 років тому

    @jeepnypitpits It is wrong because you use a calculator for such an easy task. Even if you had very little knowledge of Maths you would know that 1+50% = 1$+(50% or 0.5 or 1\2 of 1)$ = 1$+0.5$ = 1$+0.50$ = 1.50$

  • @ericanthonyjones2131
    @ericanthonyjones2131 6 років тому +4

    ok in theory -- but learn your basic multiplication tables, dude. 8 x 12 = 96. 100/12 = 8 and 1/3 aka 8.33... fix it for the video.

  • @MsTrinidadgirl
    @MsTrinidadgirl 10 років тому

    I cant hear this video

  • @jeepnypitpits
    @jeepnypitpits 12 років тому

    why is 1+.50(50%) = 1.50 when my calc is saying 1+.50(50%) = 1.25 my calculator is Casio fx-991ES :-)

  • @BuffLogy14
    @BuffLogy14 10 років тому

    Georgian?

  • @deborahsigler3262
    @deborahsigler3262 7 років тому +5

    I hate math and my mom makes me do 3-11 pages a day, but not my older brother. 😒😢

  • @AlexFoeShizzle
    @AlexFoeShizzle 12 років тому

    ..... I'm in grade 7, can't I just learn this like in 5 years... Don't really need it now -_-

  • @girlynathalie
    @girlynathalie 5 років тому +1

    This doesn’t sound like english to me😭😭 I don’t understand math😪

    • @ayeflippum
      @ayeflippum 2 роки тому

      *girlynathalie.xo1* Algebra is not difficult. However, his delivery and presentation aren't optimal. That said, you do need the desire and willingness to put in the necessary effort to learn anything.

  • @mrslove2learn
    @mrslove2learn 13 років тому

    I cant ever read with the tools you use. They need to be thinner and you need to not moosh it all so close together.

  • @rakeshdutta623
    @rakeshdutta623 2 роки тому

    100 ÷ 12 = 8.5 🤔....can't understand this one.. Please explain

    • @JuteTwine
      @JuteTwine Рік тому

      Loan shark Sal padded the interest rate a little bit.

  • @leingthelennart
    @leingthelennart 12 років тому

    what's wrong about that ?

  • @girlynathalie
    @girlynathalie 5 років тому

    I’m just confused.

  • @axelputin7346
    @axelputin7346 7 років тому

    local loan shark haha

  • @VerryLongName
    @VerryLongName 8 років тому

    Sal, is math difficult?

    • @zuesr3277
      @zuesr3277 8 років тому

      No, because of Sal it's lot easier.

  • @tryingtodosupidela
    @tryingtodosupidela 11 років тому

    buying a suit with a dollar...

  • @jescudi_
    @jescudi_ 8 років тому +4

    Lol your examples are slightly off. You said 1+.5(.5)=1.5 when i think what you meant to write was 1+1(.5)=1.5

  • @lucidhyperblitz
    @lucidhyperblitz 14 років тому

    dude not right. 1.25 not 1.50

  • @ivant383
    @ivant383 8 років тому

    Hi guys,
    I have a question. Let's say that the Principal is $20 at rate 10% compound interest over 6 months. Correct me if I'm wrong: $20(1+0.10/6)^6^(1) --> 22.0852../6 = 3.68.... interest per month?? am I right?

    • @ivant383
      @ivant383 8 років тому

      $20 for 1 year at interest gets $22 does it make sense getting $22.0852... for 6 months, but $22 for 1 year. for 12 months $22.094... these are the formulas that I used: 20*(1+0.1)^1 and 20*(1+0.1/12)^12^1, please someone throw some light on the matter :)

    • @ivant383
      @ivant383 8 років тому

      Hopefully, don't spam but I think I got it, why there is a difference. In the first example it is compound only once 20*(1+0.1)^1 , but in the second example interest is compounded every month (12 months) 20*(1+0.1/12)^12^1 and that is why the total amount is larger? From what I can tell from a lender's point of view it is better the interest to be compounded every month rather than once a year.

  • @smirnoff29
    @smirnoff29 15 років тому

    50% of 1 in six months - 25 cents. comon sal tht ruins the whole vid

  • @MistaFranko
    @MistaFranko 13 років тому

    Sal i need a Dollar

  • @mattsam123123123
    @mattsam123123123 12 років тому

    r u musim

  • @147andymc
    @147andymc 12 років тому

    gay

  • @dominicandon7
    @dominicandon7 11 років тому

    I hate math so much!