Deriving the Annual Compound Interest Formula

Deriving the Annual Compound Interest Formula For more free math videos, visit
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25 Responses to “Deriving the Annual Compound Interest Formula”

  1. baldbeauty821 says:

    Can you do parenteses problems

  2. hilo2hell says:

    how do i do quarterly?? and daily??

  3. VVeZoX says:

    He does say where the one comes from. Watch an earlier video in this playlist and you will see. Think before you post…

  4. YohamaMr says:

    { (P x i) + P = Pi + P }
    (Principle x interest) is due after the 1st year
    Principle is returned after the 1st year
    Factoring leads to P(1 + i )
    in the lesson YOU DO NOT EXPLAIN WHERE YOU AND WHY YOU SAY one (1)
    curious student will want to know where you get the ONE.
    Thank you for the lesson

  5. worthwords420 says:

    Ezekiel 18:17
    Withholds his hand from iniquity, takes no interest or profit, obeys my rules, and walks in my statutes; he shall not die for his father’s iniquity; he shall surely live.

  6. patrickJMT says:

    the derivation looks like a wonderful proof to me

  7. ronenfe says:

    how do you prove this formula? by induction?

  8. GPrtn says:

    JESUS CHRIST – God Himself came into this world, He died for our sins, He was buried, and God the Father raised Him from the dead, and through His Sacrifice we live in victory – JESUS CHRIST IS LORD !

  9. shaydie says:

    I hope I pass my math.This video is my saving grace. I am actually feeling hopeful. Thank you for taking the time to do this. You didnt have to. This is my last class before I graduate and I have less than 10 days left.

  10. Amit Badoni says:


  11. transformersdial says:

    Thank You so much for the help i have had a late math assignment you were the only one who could help me understand thank you.

  12. Pdrum2 says:

    I think you should you are good at expaining clearly.

  13. Pdrum2 says:

    oops took

  14. Pdrum2 says:

    Yewh it tooks me a while to figure that out, if you multiply any number by one you get that number

  15. laxmanica43 says:

    he does use .06, he just simplifies the (1+.06)

  16. ian559fresno says:

    Dear Patrick, can you please make a video on Newton’s law of cooling? I searched it on youtube and it was a suggestion with your name next to it but I guess there was no video. (Search Newtons law of cooling p…and patrickjmt pops up next to it)? Thanks

  17. HerroKerushii says:


  18. patrickJMT says:

    if you multiply a number by 1, it does not change. if you multiply it by 1.06, it gets larger by .06 or 6%

  19. chocopie645 says:

    thanks for the help! wayy better than my math teacher blabbing on and on D:
    but i’m still wondering, why is the 1+ there in the 1+ .06 ?
    (sorry if that sounds stupid, but pleease reply!)
    thanks :)

  20. Henry Brandeis says:

    it is einstein
    wake up mr jordan

  21. MrJordan20061991 says:

    Isn`t it 0.06 because it is 6% , not 60

  22. patrickJMT says:

    i do not have any videos about annuities although i may make some soon!

  23. MetalBassjunkie420 says:

    Do you have a video where I can find help for calculations like this one?: What is the value of an annuity that will pay you $5000 each year for 30 years at a discount rate of 6%? What is the value of the annuity if you use a 12% discount rate?

  24. Dinesh Takyar says:

    Very neatly explained. Thanks.

  25. afreakenracoon says:

    thanks alot this question was really messing with me :P and ya it was for my grade 11 math exam

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