Compound Interest Course

Lesson 1 • Simple Interest Mechanics

Covers the simple interest formula and its linear growth pattern. Provides a baseline for contrasting with compound interest in later sections.

Lesson 2 • The Concept of Money Over Time

Explains why a rand today is worth more than a rand tomorrow using opportunity cost. Anchors the entire course in the economic rationale for interest.

Lesson 3 • Introduction to Compound Interest

Defines compounding as earning interest on previously earned interest. Establishes the exponential growth pattern that distinguishes compound from simple interest.

Lesson 1 • Calculating Future Value

Applies the formula to compute future value across varied scenarios. Reinforces correct order of operations and unit consistency.

Lesson 2 • Solving for Time

Uses logarithms to solve for the unknown time period in the compound interest formula. Introduces the doubling-time concept as a practical application.

Lesson 3 • Formula Error Analysis

Identifies common computational mistakes such as mismatched rate-period units. Develops error-checking habits that carry through the entire course.

Lesson 4 • Solving for Principal and Rate

Rearranges the formula algebraically to isolate principal or interest rate. Builds algebraic manipulation skills essential for reverse-engineering financial targets.

Lesson 1 • Effective Annual Rate

Defines the effective annual rate (EAR) as the true yearly return after accounting for compounding frequency. Enables apples-to-apples comparison of financial products.

Lesson 2 • Daily and Continuous Compounding

Extends discrete compounding to daily frequency and introduces the continuous compounding formula A = Pe^(rt). Demonstrates the mathematical limit of compounding frequency.

Lesson 3 • Annual Percentage Yield in Practice

Connects EAR to the annual percentage yield (APY) used in consumer financial products. Learners interpret and compare APY disclosures across savings and investment products.

Lesson 1 • Comparing Lump Sum vs. Annuity

Uses PV analysis to decide between receiving a lump sum now or a series of future payments. Applies decision criteria grounded in compound interest logic.

Lesson 2 • Present Value Fundamentals

Derives the present value formula by rearranging the future value equation. Establishes discounting as the inverse operation of compounding.

Lesson 3 • Choosing the Discount Rate

Explains how opportunity cost, risk, and inflation inform discount rate selection. Demonstrates how rate choice materially changes present value outcomes.

Lesson 4 • Discounting Multiple Cash Flows

Extends single-payment PV to streams of unequal future cash flows. Builds the skill of summing discounted values to assess total present worth.

Lesson 1 • The Power of Starting Early

Quantifies the advantage of early investing through side-by-side compound growth comparisons. Motivates time-in-market discipline as a core wealth-building principle.

Lesson 2 • Savings Account Growth Modelling

Models balance growth in interest-bearing savings accounts using the compound interest formula. Introduces the impact of initial deposit size and rate on long-term outcomes.

Lesson 3 • Investment Portfolio Compounding

Applies compound growth logic to equity and mixed-asset portfolios using average annual return assumptions. Addresses variability and the geometric mean return.

Lesson 4 • Certificates of Deposit and Fixed Terms

Applies compounding to fixed-term deposit products with defined maturity dates. Covers early withdrawal penalties as a reduction in effective compounding.

Lesson 1 • Loan Amortisation Mechanics

Breaks down fixed-payment loans into interest and principal components using an amortisation schedule. Shows how early payments are interest-heavy and later payments reduce principal faster.

Lesson 2 • How Debt Compounds Against Borrowers

Explains how unpaid interest is added to principal, increasing the base on which future interest accrues. Frames compounding as a cost multiplier in debt contexts.

Lesson 3 • Credit Card Compounding

Models daily compounding on revolving credit card balances and minimum payment traps. Calculates true cost of carrying a balance over time.

Lesson 4 • Strategies to Minimise Debt Compounding

Evaluates accelerated repayment, lump-sum paydowns, and debt consolidation using compound interest maths. Quantifies savings from each strategy in interest-cost terms.

Lesson 1 • Net Present Value Analysis

Applies discounted cash flow logic to evaluate investment projects by summing present values of all cash flows. Introduces NPV decision rules for accept-or-reject choices.

Lesson 2 • Comparing Competing Financial Options

Uses NPV, IRR, and EAR together to rank and select among competing financial alternatives. Integrates all advanced tools into a unified decision framework.

Lesson 3 • Tax Drag on Compounding

Quantifies how annual taxation of interest income reduces effective compounding rates. Compares tax-deferred and taxable account growth over long horizons.

Lesson 4 • Internal Rate of Return

Defines IRR as the discount rate that sets NPV to zero and explains its relationship to compound interest. Covers IRR calculation methods and comparison to a hurdle rate.

Lesson 1 • Education Savings Projections

Models education cost inflation and required savings using compound growth formulas. Compares lump-sum and periodic contribution strategies for meeting future tuition targets.

Lesson 2 • Stress-Testing Financial Plans

Subjects compound interest projections to adverse scenarios including rate drops, inflation spikes, and contribution gaps. Builds resilience into financial plans through scenario analysis.

Lesson 3 • Wealth Transfer and Estate Compounding

Applies compound interest to multi-generational wealth transfer scenarios and trust growth projections. Highlights how compounding amplifies estate values over decades.

Lesson 4 • Retirement Accumulation Planning

Projects retirement corpus requirements using future value of annuity formulas and real return assumptions. Integrates contribution rates, time horizons, and target income replacement.