How do you know if a word problem question is asking for simple interest or compound interest?
P.s. I already know the formula and what both of them mean
the problem will tell you which it is. Although, if it neglects to say the compounding period, it is most likely simple interest.
Is there any key words that I should remember for each of them
yeah - compound or simple!
Is there any other key words bc the teacher like to go hard and they never say compound or simple.
To determine if a word problem is asking for simple interest or compound interest, you need to carefully read and understand the information provided in the question. Here are a few tips to help you identify which type of interest is being referred to:
1. Look for clues in the question: Pay attention to keywords such as "interest," "rate," "investment," or "loan." The context provided in the question can often give you an indication of whether simple or compound interest is being discussed.
2. Check for compounding periods: Compound interest involves periodic compounding, which means the interest is calculated and added to the principal at regular intervals. The question might mention compounding periods like annually, semi-annually, quarterly, monthly, etc., indicating compound interest.
3. Consider the time period mentioned: Simple interest typically applies to a fixed time period, whereas compound interest can accumulate over multiple time periods. If the question mentions interest over several years or a specific number of compounding periods, it is likely referring to compound interest.
4. Evaluate the formula relevance: Although you mentioned being aware of the formulas, it is still essential to understand which formula is relevant to the question. The formula for simple interest is I = P * R * T, where I represents interest, P is the principal amount, R is the interest rate, and T is the time in years. On the other hand, compound interest can be calculated using the formula A = P * (1 + r/n)^(n*t), where A represents the accumulated amount, P is the principal, r is the interest rate, n is the number of compounding periods per year, and t is the time in years.
By analyzing these aspects within the word problem, you can determine if the question is asking for simple interest or compound interest, allowing you to apply the appropriate formula.