What's an easy way to calculate compound interest without doing each equation one by one?

Guest Apr 25, 2017

#2**+2 **

Yes, the equation is

\(FV=PV*(1+r)^n\)

where

FV is the future value

PV is the present value

r is the interest rate per compounding period as a decimal

n is the number of compounding intervals

Example

$3000 invested at 6% pa compouned monthly for 5 years.

pa stands for per annum which is per year. But since it is compounded montly the rate is 0.06/12 = 0.005

n=5*12=60

PV=3000

FV=3000*(1+0.005)^60 = $4046.55

Melody
Apr 25, 2017