+0  
 
0
895
2
avatar

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

 Apr 25, 2017
 #1
avatar+75 
+2

Create the equation,( a=p(1+r)^t ) and copy and paste it 

 Apr 25, 2017
 #2
avatar+118587 
+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

 Apr 25, 2017

1 Online Users