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Compound interest introduction | Interest and debt | Finance & Capital Markets | Khan Academy finance math



Learn about the basics of compound interest, with examples of basic compound interest calculations. Created by Sal Khan.

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Finance and capital markets on Khan Academy: Interest is the basis of modern capital markets. Depending on whether you are lending or borrowing, it can be viewed as a return on an asset (lending) or the cost of capital (borrowing). This tutorial gives an introduction to this fundamental concept, including what it means to compound. It also gives a rule of thumb that might make it easy to do some rough interest calculations in your head.

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Compound interest introduction | Interest and debt | Finance & Capital Markets | Khan Academy

Compound interest introduction | Interest and debt | Finance & Capital Markets | Khan Academy

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Compound interest introduction | Interest and debt | Finance & Capital Markets | Khan Academy
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23 thoughts on “Compound interest introduction | Interest and debt | Finance & Capital Markets | Khan Academy finance math”

  1. Can you help me solve this? I have $10,000 invested at 20% interest per year, compounded daily. BUT, in order for me to collect the interest (and reinvest it) I have to pay 40cents (regardless of how many days of interest have accumulated). What is the optimal number of days that I should wait to collect my interest and reinvest it?

  2. Talking about logarithm in this video is not sticking to the name of this video. "Introduction" to compound interest! I especially am trying to understand what the 1 stands for in the compound interest formula for my 9th grade son. Kahn didn't even write down the compound formula. A = P(1 + r/n) ^ nt
    I wish he explained better what the 1 stands for. The math book hardly explains where the 1 comes from. the growth factor equals 1 plus the percent rate of change expressed as a decimal. is what it says in the algebra book.

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