Accounting: Tools for Business Decision Making, 5th Edition

Published by Wiley
ISBN 10: 1118128168
ISBN 13: 978-1-11812-816-9

Appendix D - Time Value of Money - Brief Exercises: BED-6

Answer

$FV = p\times(1 + i)^n$

Work Step by Step

Compound interest is interest that is earned on both the principal and on prior interest. $future\ value = principal\times(1 + interest)^n$ Where n is the number of periods over which the compounding occurs and i is the interest rate for each period.
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