I was wondering about the correct formula for compound interest

I was wondering about the correct formula for compund interst

 

\(FV=P(1+r)^n\)

 

FV stands for future value

P stands for Principal or prasent value.  Ir is what you invest to start with :)

r stands for the rate per compounding time period

SO

if it is 6% per annum compounding quarterly then it is r=6/4% (because there are 4 quarters in a year)

r= 1.5% = 0.015

1+r = 1.015

 

If you want to know what it will be worth in 5 years then

there are 4 quarters every year so 4*5=20 quarters in 5 years so   n=20

 

\(FV=P*1.015^{20}\)

Here is the formula for compound interest:

FV=PV( 1 + i)^n, where FV=Future value, PV=Present value, i=Interest rate as a decimal per period, n=number of periods.