Compound Interest. How???

All You Need To Know About

Compound Interest

One day, I borrowed a piece of paper. Not from just anyone. He is powerful, ruthless, carries a huge pencil, wears shades, and calls himself: Mr Guo. The Ultimato Loan Shark.

He said:

• You owe me a piece of paper today. I will charge you compound interest
• My interest rate is 100% per week. If you don't pay up soon with two fresh pieces of drawing block, you shall see...
• And I don't mean a piece of cardboard. Although that IS 2 times a piece of drawing block in width.

I said:

• But, what is compound interest? How the hell am I supposed to pay you?
• Oh CRAP.

But then Mr Guo the Ultimato Loan Shark ( M-GULK ) disappeared. I stood there. What the hell is compound interest?

Is it...

1. A very sexy girlfriend? Nah. How am I supposed to pay him in girlfriends. Even I do not know that many girls.
2. Something... interesting?
3. Maybe....
4. Maybe something related to paying back in drawing blocks...
5. Hmmm... if that fits...
6. I SHALL GIVE HIM...
7. AN INTERESTING PIECE OF DRAWING BLOCK!

As I sped off to do something about the drawing block... a classmate approached me. Trembling, I asked "What in the frickin' hell are you?!"

He said " I am... Max!"

"OMFG."

Could it be him? Can a bespectacled nerd help me with my problems? Is he my ultimate SAVIOUR...?

He sat down and wrote on the concrete floor:

Maxy Waxy's Method to

Baking the PERFECT cake.

OOPS. I mean the perfect payment.

1. First things first.
2. There is something out there in the universe that is hell more ruthless than SIMPLE INTEREST.
3. It is called: COMPOUND INTEREST
4. This interest increases the payment amount a lot more faster than wimpy SIMPLE INTEREST.
5. This is the formula to calculate it.
6. What do you owe?
7. A piece of drawing block?
8. Call that " a "
9. OK.
10. Next, get the interest percentage.
11. 100%
12. Timespan?
13. per week.
14. Ok. COMBINE what you wrote for the last two sentences and turn it into a rate.
15. 100%/wk.
16. Very good.
17. Now, find out what is the value of the percentage given of what you owe.
18. ... still 1 piece of drawing block.
19. Add that to what you originally owe.
20. 2 pieces of drawing block.
21. Yep. That's what you must return him by next week.
22. What about next next week?
23. Use the same formula for this one too.
24. Oh S***! Now I owe 4 pieces!
25. And that will go on and on... increasing until you pay up. That is what you call : COMPOUND INTEREST.

The End.

Suddenly, Max dies from choking on a potato chip. Nasty. The nerds didn't save him. Well at least you know what is compound interest. Interest calculated on the current amount you owe (with all the other interest added up) instead of the original amount (in this case one piece of drawing paper.) Gotta return that drawing paper fast!

THE END.-------------------------------------

PS: Stay tuned for more fun lessons!

The Amazing World of... Money?

All You Need To Know About Interest.

Interest is...

1. Not your hobbie
2. Not your sexual relationships
3. Definitely not your girlfriend.

Interest is...

1. Cool
2. Nice
3. Interesting
4. Because...
5. HELLO??? Check the Dick-tionary! (a male's most reliable resouce. )
6. The Dick-tionary says that interest is concerned with money.
7. Money as in owing Mr Guo a piece of drawing block.
8. Only after 2 weeks you start to owe him MORE than a piece. You owe him 4 pieces of drawing block. Most UNPLEASANT.
9. This is what you call: COMPOUND INTEREST. Compound interest is one of the most unpleasant forms of interest. Let us show you what is SIMPLE INTEREST first.
10. Simple interest is fairly unpleasant. Supposedly you owe me ten cents.
11. That's fine.
12. Then I say... " My interest rate is 50% per minute. It's simple interest, don't you worry."
13. How do you calculate THAT?

SUDDENLY... a chicken flies through the window into the room ( you know who ). He takes out a feather pen and starts stabbing himself. Then, he dips his feather pen in blood and writes on the floor...

The Interesting Interest

By Chik Cheng Jie a.k.a The Chickenator

• 50% is half of the amount you owe.
• Therefore the 50% of ten cents is 5 cents. Puny.
• This is what you call: The amount you owe Goaty ( Yang a.k.a Goat in CL )
• Next. Get the rate right.
• It is completely fine if you owe him 5 cents.
• But it is not when you owe him 5 cents per milisecond.
• Therefore get the rate. The formula is simple.
• Take the amount you owe Goaty and write it down. ( not necessary Goaty. Maybe ME. )
• Write a slash after the amount. Should look like this: 5c/
• Then, get the time right. If you owe him 5c per minute, then write down the time span ( for now it's minute ) after the slash.
• Should look a little something like this: 5c/min
• There. Now you have what you call: RATE
• The good side of simple interest is that you only pay the same additional amount of money to the person you owe in interest in addition to what you already owe.
• So... pay back quickly or you will have to pay that extra sum of money, Interest, adding up by the rate of payment.
• If you take forever... you are most likely going to make Goaty a rich man.
• So, never pay your debts late.
• Never.

Suddenly... the Chicken stops writing and falls to the ground in a pool of red blood. Stupid old bird. Shouldn't have stabbed himself in the heart. I HAVE a pen with me you know. ( no offence to Cheng Jie ). And that's all I have to tell you guys about Simple Interest.

The End-------------------------------------------------

PS: As for Compound Interest, we will be posting it soon. Cheers and give your comments. Cheers.

Numbers...

There are people who do very complex calculations, however, they don't even know what the word "numbers" mean.

Just for dummies: Numbers are mathematical objects used for counting or measuring.

This is what some students said when we interviewed them while they were doing complex mathematical questions:

"Numbers are...err...Something you use in your maths paper..."
"Like who donno... Let's see ah... Eh, what are numbers?"
"Simple...Numbers are just...err....Numbers lah! You know what I mean...."

This proves that many of us don't even know what numbers are although we use them in our daily lives. That's strange...