Calculates principal principal plus interest rate or time using the standard compound interest formula A P1 rnnt. A formula is needed to provide a quantifiable comparison between an amount today and an amount at a future time in terms of its present day value. Typically cash in a savings account or a hold in a bond purchase earns compound interest and so has a different value in.
How to find the Future Value when interest is compounded.
PVfrac C 1in P V 1 inC. This formula is applicable if the investment is getting compounded annually means that we are reinvesting the money on an annual basis. Based on Principal Amount of 1000 at an interest rate of 75 over 10 years. PVfrac C 1in P V 1 inC.