Calculate the Interest Loan at Start Interest Rate Add the Interest to the Loan at Start to get the Loan at End of the year The Loan at End of the year is the Loan at Start of the next year. To see the bigger impact of compound interest compute interest for later years. In formula terms this would be 1 1i n.
I Interest rate where 1 is 100 n number of periods.
P V C 1 i n. Total Value 206103 Total. C Future sum. Thus present value calculations are simply the reciprocal of future value calculations.