it's just really easy to memorize the formula and ask students to copy down but you are really doing a great job to explain where that formula comes from... thanks so much ....things just really make sense now.
n is the number of times the interest is calculated, say , if the interest is calculated once per annum, then n will be one , if it's twice a year n=2, since in this video example, we have the interest calculated once a year , n is 1
The interest rate is 6% in this example, which is 0.06 as a decimal. To find interest for the next year, you multiply the principal by the interest rate (x 0.06) plus the principal itself (x 1) to give you the total of the principal and the interest. Because 0.06 plus 1 equals 1.06, that’s the same as multiplying by 1.06.
@@arrcchu Formula changes at higher level where r is rate divided by no. of conversion period and n is time into no. of conversion period So it's basically same as theirs
