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Introduction to Simple and Compound Interest - Revised

Accounting
Free Course
Any person with a bank account, credit card, or bank loan will come across aspects of simple interest and compound interest. However, many people have difficulty distinguishing between the two types of interest and understanding how they should be calculated. In this free online accounting course, you will learn how simple and compound interest works, how they are used in daily life, and how simple interest and compound interest are calculated.
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  • Duration

    1-2 Hours
  • Assessment

    Yes
  • Certification

    Yes
  • Responsive

    Yes
  • Publisher

    Khan Academy

Description

Outcome

Certification

View course modules

Description

Interest is money paid regularly at a particular rate for borrowed money, or for delaying the repayment of a debt. It can also be looked at as rent on money borrowed. This course will first discuss simple and compound interest and teach you how they are calculated. You will study the principal which is the amount of money initially borrowed. You will also learn about the natural log of 10 which is equal to 2.302585.

Compound interest is interest calculated on the initial principal, which also includes all of the accumulated interest of previous periods of a deposit or loan. It is a little more complicated than simple interest but this course explains the concept clearly and covers the methods used for calculating compound interest. You will learn that by incorporating the principal amount, interest rate, time factor, and compound periods, it will give you the amount of compounded interest.

Interest is essentially a rental or leasing charge levied on the borrower for the use of an asset. For loans, the interest rate is applied to the principal, which is the amount of the loan. By the end of this course, you will fully understand two crucial forms of interest, which will make your financial decisions much easier. This is powerful knowledge, so check out the course today and learn something really useful.

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Learning Outcomes

You will be assessed on the following Learning Outcomes:


  • Define Simple and Compound Interest
  • Examine how to calculate Simple and Compound Interest using formulas
  • Explain the key differences of each and when they are used
  • Discuss the general concept of how interest is calculated on loans

Certification

All Alison courses are free to enrol, study and complete. To successfully complete this Certificate course and become an Alison Graduate, you need to achieve 80% or higher in each course assessment. Once you have completed this Certificate course, you have the option to acquire official Certification, which is a great way to share your achievement with the world. Your Alison Certification is:

Ideal for sharing with potential employers - include it in your CV, professional social media profiles and job applications
An indication of your commitment to continuously learn, upskill and achieve high results
An incentive for you to continue empowering yourself through lifelong learning

Alison offers 3 types of Certification for completed Certificate courses:

Digital Certificate - a downloadable Certificate in PDF format, immediately available to you when you complete your purchase
Certificate - a physical version of your officially branded and security-marked Certificate, posted to you with FREE shipping
Framed Certificate - a physical version of your officially branded and security-marked Certificate in a stylish frame, posted to you with FREE shipping

All Certification is available to purchase through the Alison Shop. For more information on purchasing Alison Certification, please visit our faqs. If you decide not to purchase your Alison Certification, you can still demonstrate your achievement by sharing your Learner Record or Learner Achievement Verification, both of which are accessible from your Dashboard. For more details on our Certification pricing, please visit our Pricing Page.

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