|Objective||To teach kids the difference between simple and compound interest and to show them how to calculate interest.|
When you borrow money they are charged interest and when you lend money or invest money you are paid interest. There are different types of interest do the following activity to discover the difference between simple and compound interest.
Simple interest is calculated only on the principal amount or the portion of the principal which remains unpaid.
You calculate simple interest using the following formula: Interest = Principal x Interest Rate x The Number of Time Periods the interest is applied (I=PRT)
Compound interest is paid on the original principle and on the accumulated past interest.
The formula for calculating compound interest varies depending upon whether the loan will be paid over a number of years or whether the interest is applied in more frequent intervals. Here is some information on the formula for compound interest.
Calculate interest Worksheets and Calculators:
Here are some worksheets and calculators to help you teach this to your kids:
Mark this activity as complete when you have a good understanding of simple and compound interest and you have completed one simple interest worksheet and one compound interest worksheet.
Track your progress and earn badges!
This activity is included in the following:
|Age Range||10 11 12 13 14 15 16 17 18|
|Tags||Logical-Mathematical Intelligence Linguistic Intelligence Interest|
|Wikipedia||Here is a Wikipedia post about interest .|
|Frugal Living||Here is some information about simple inte rest and compound interest .|