In this lesson, you will learn about "compound interest and time," one of the most important topics in the basics of money. Rather than memorizing words alone, aim to explain the system and reasons in your own words.
Key Point
With compound interest, interest is earned not only on the principal but also on past interest, so the difference from simple interest grows as the period becomes longer.
With compound interest, interest is earned not only on the principal but also on past interest, so the difference from simple interest grows as the period becomes longer.
Important Points
- Check not only the conclusion but also the reasons behind it
- Distinguish similar terms and exceptions
- Try applying the same way of thinking to other examples
Practice
- Explain the key point in two sentences.
- Give one common misunderstanding and explain what is different about it.
- Check your understanding by applying it to a familiar or specific example.