3. Compound Interest
4.3 (7 ratings)
Course Ratings are calculated from individual students’ ratings and a variety of other signals, like age of rating and reliability, to ensure that they reflect course quality fairly and accurately.
599 students enrolled

3. Compound Interest

This course will show you the power of compound interest and reinforce the time value of currency.
4.3 (7 ratings)
Course Ratings are calculated from individual students’ ratings and a variety of other signals, like age of rating and reliability, to ensure that they reflect course quality fairly and accurately.
599 students enrolled
Created by Helen Dakin
Last updated 2/2014
English
English [Auto]
Current price: $13.99 Original price: $19.99 Discount: 30% off
5 hours left at this price!
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This course includes
  • 1.5 hours on-demand video
  • 1 article
  • 4 downloadable resources
  • Full lifetime access
  • Access on mobile and TV
  • Certificate of Completion
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What you'll learn
  • you will be able to determine the compound interest earned on an investment over a given period of time (even if the rate changes)
  • you will be able to determine the cash value of a payment due in the future
  • you will be able to discount more than one payment due in the future to come up with an equivalent cash value for all
  • you will be able to solve for the nominal interest rate of an investment
  • you will be able to determine the number of interest periods required for an investment to have a specified maturity value
Requirements
  • you will need a scientific calculator with an exponent key and at least one memory storage location. A financial calculator would be even better.
  • you will need to have a good understanding of the time value of money.
  • you may complete the pre-requisite course on Simple Interest as many of the concepts discussed in Simple Interest are repeated for Compound Interest (only the formulas are different).
  • Simple Interest.
Description

In this course, you will learn how to determine the maturity value of an investment using compound interest. You will also be able to determine the present value if you are provided with the future value. You will be provided with a base set of course notes which you can use while you are watching the videotaped lectures. The course will take about 3-4 days to complete but this may vary among different students. There are lots of quizzes built in throughout the course to test your understanding of the materials at different stages.

To fully appreciate the concepts of Compound Interest and how time and rates affect the value of currency, you may wish to go over the learning materials found in the Basics of Simple Interest . 

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Who this course is for:
  • students who are taking a mathematics of finance course
  • business students
  • students who need an additional resource for compound interest calculations
Course content
Expand all 21 lectures 02:09:20
+ Compound Interest - Introduction and the Future Value formula
6 lectures 14:05

These will serve as your lecture notes while you are viewing the videos. Print them in advance and use them to make your notes while you are solving the problems.

Preview 8 pages
Future Value - example 4 - rate change
05:18
future value
2 questions
+ Compound Interest - the Present Value formula
4 lectures 13:05
Present Value - example 1
02:23
Present Value - example 3
03:20
Present Value - example 4 - rate change
05:08
present value
2 questions
+ Solving for the Term or the Interest Rate and Equivalent Rates
5 lectures 40:35

These will serve as your lecture notes while you are viewing the videos. Print them in advance and use them to make your notes while you are solving the problems.

Preview 9 pages
Solving for the Nominal Interest Rate
09:00
the rate
1 question
Solving for the Number of Interest Periods (n)
08:46
number of periods
2 questions
Equivalent Rates - examples 1 and 2
11:26
Equivalent Rates - examples 3-5
11:23
equivalent rates
2 questions
+ Equivalent Payments and Equations of Value
6 lectures 36:35

These will serve as your lecture notes while you are viewing the videos. Print them in advance and use them to make your notes while you are solving the problems.

Preview 6 pages
Equivalent Payments
11:49
Equations of Value - example 1
05:41
Equations of Value - ex 2
09:36
Equations of Value - ex 3
09:18