00:01
Okay, here we're doing compound interest at 1 .5 % per year.
00:05
And what i want to do is go from £6 ,000 to £7 ,000 to get the interest of a thousand.
00:13
Well, the formula for compound interest is this.
00:16
A equals p.
00:19
A is the end amount, p starting amount, 1 plus r, the interest rate over 100, power of t, t is number of years.
00:29
To get $1 ,000, or pounds rather interest, i want to end up to £7 ,000 from my starting amount of $6 ,000.
00:40
Protote r is 1 .5%, so 1 .5 over 100, and t i want to find.
00:50
So what we do here then is divide both sides by $6 ,000, so $7 ,000 over $6 ,000 equals 1 .0.
01:01
Here it's going to be 015.
01:08
If i divide 1 .5 by 100, i get 0 .15 power of t...
