Today we went over the topics of compound interest and income tax.
On compound interest we looked at how you could use the compound interest formula to work out the principal, given the amount of interest earned over a given number of years.
E.g. what principal will earn 315.35 interest at 5% over 3 years?
P +315.25 = P(1.05)³
P +315.25 = P(1.157625)
P(1.157625) - P = 315.25
Factor LHS:
P(1.157625 -1) = 315.25
P = 315.25/0.157625 = 2000
Income Tax questions are straightforward once you know the terms used and lay your work out clearly. Practice the questions where you have to work backwards to find the original Gross Income.
Also, watch out for older editions of the textbook. You do not need to know about Tax Free Allowance - just standard rate cut-off and tax credits.
Tomorrow we will get started on geometry.
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