Interest, Debt and CompoundingThe maths behind loans and savings — the same formula pointing…10th GradeSimple interest is charged only on theoriginal amount. Compound interest is chargedon the balance including previous interest.A = P(1 + r/n)^(nt)Simple: £1000 at 5% for 3 yrs£1150I = P × r × t. Interest never grows.Compound: same, yearly£1157.63Each year earns on the new balance.Over 30 years£4321 vs £2500The gap widens dramatically with time.On a debtit works against youCredit card interest compounds monthly.Compounding rewards starting early and punishes carrying debt. Samemaths, opposite sides.Interest, Debt and Compoundingwww.littleactivity.com

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Life Skills · 10th Grade

Interest, Debt and Compounding

The maths behind loans and savings — the same formula pointing two ways.

How to use it

Run the compound interest formula on a credit card balance. It is a persuasive lesson.

Free · print-ready PDF · US Letter and A4

Grade
10th Grade
Ages
15–16
Subject
Life Skills
Pages
1

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