Compound Changes
Ever wondered how your savings grow over time or why car values drop each year? Compound changes happen when you apply percentage changes repeatedly - like getting interest on your interest!
The magic formula is: compound value = original × (multiplier)ⁿ. Remember that 25% less means multiply by 0.75, whilst 5% more means multiply by 1.05. The 'n' tells you how many time periods you're dealing with.
Reverse problems work backwards from the final amount. If £3375 becomes your total after 3 years at 50% interest, divide by 1.5³ to find you started with £1000. For unknown time periods, you'll need logarithms - don't panic, your calculator can handle these!
Quick tip: When no original value is given, just pick a round number like £10,000 to make calculations easier.
