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  • Dynamic Compounding Interest Formula

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    stefantasik
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    This document presents the formula for calculating the future value (FV) of an investment using the annuity formula. It defines the variables used in the formula such as beginning balance (PV), compounding periods per unit of time (m), payment amounts in each period (p1, p2, etc.), rates of return in each period (r1, r2, etc.), and duration of each period (t1, t2, etc.). The formula calculates FV as the sum of the present value plus the accumulated value of each payment amount compounded over time.

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    Dynamic compounding interest formula

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    This document presents the formula for calculating the future value (FV) of an investment using the annuity formula. It defines the variables used in the formula such as beginning balance (PV), compounding periods per unit of time (m), payment amounts in each period (p1, p2, etc.), rates of return in each period (r1, r2, etc.), and duration of each period (t1, t2, etc.). The formula calculates FV as the sum of the present value plus the accumulated value of each payment amount compounded over time.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    7 views1 page

    Dynamic Compounding Interest Formula

    Uploaded by

    stefantasik
    This document presents the formula for calculating the future value (FV) of an investment using the annuity formula. It defines the variables used in the formula such as beginning balance (PV), compounding periods per unit of time (m), payment amounts in each period (p1, p2, etc.), rates of return in each period (r1, r2, etc.), and duration of each period (t1, t2, etc.). The formula calculates FV as the sum of the present value plus the accumulated value of each payment amount compounded over time.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 1

    𝐹𝑉 = 𝐸𝑛𝑑𝑖𝑛𝑔

    𝑏𝑎𝑙𝑎𝑛𝑐𝑒
    𝑃𝑉 = 𝐵𝑒𝑔𝑖𝑛𝑛𝑖𝑛𝑔 𝑏𝑎𝑙𝑎𝑛𝑐𝑒
    𝑚 = 𝐶𝑜𝑚𝑝𝑜𝑢𝑛𝑑𝑖𝑛𝑔 𝑝𝑒𝑟𝑖𝑜𝑑𝑠 𝑝𝑒𝑟 𝑢𝑛𝑖𝑡 𝑡
    𝑝! = 𝑃𝑎𝑦𝑚𝑒𝑛𝑡 𝑖𝑛 𝑝𝑒𝑟𝑖𝑜𝑑 1
    𝑟! = 𝑅𝑎𝑡𝑒 𝑜𝑓 𝑟𝑒𝑡𝑢𝑟𝑛 𝑖𝑛 𝑝𝑒𝑟𝑖𝑜𝑑 1
    𝑡! = 𝐷𝑢𝑟𝑎𝑡𝑖𝑜𝑛 𝑜𝑓 𝑝𝑒𝑟𝑖𝑜𝑑 1

    ⎛⎛⎛ 𝑝! 𝑝$ 𝑝% 𝑝& ⎞ 𝑝' ⎞ 𝑝(


    𝑟! "!# 𝑚 𝑟! "!# 𝑟$ ""# 𝑚 EB1 + 𝑟$ D " − 1G⎞ B1 + 𝑟% D # + 𝑚 EB1 + 𝑟% D # − 1G⎞ B1 + 𝑟& D $ + 𝑚 EB1 + 𝑟& D $ − 1G⎟ B1 + 𝑟' D % + 𝑚 EB1 + 𝑟' D % − 1G⎟ B1 + 𝑟( D & + 𝑚 EB1 + 𝑟( D & − 1G
    ⎛ " # " # " # " # " # " # " # " # " #
    𝐹𝑉 = ⎜
    ⎜⎜ ⎜⎜A𝑃𝑉 B1 + 𝑚 D + 𝑟 EB1 + D − 1GH B1 + D + 𝑟$ ⎟ 𝑟% ⎟ 𝑟& 𝑟' ⎟ 𝑟(
    ⎜⎜⎜ 𝑚
    ! 𝑚 𝑚
    𝑚
    𝑚 𝑚
    𝑚
    𝑚 ⎟ 𝑚
    𝑚
    𝑚 ⎟ 𝑚
    𝑚
    𝑚 ⎟ 𝑚
    𝑚
    𝑚

    ⎝ ⎝ ⎝ ⎠ ⎠ ⎠
    ⎝ ⎠

    𝑃𝑉 =

    𝑝! =

    𝑝$ =

    𝑝% =

    𝑝& =

    𝑝' =

    𝑝( =

    𝑡! =

    𝑡$ =

    𝑡% =

    𝑡& =

    𝑡' =

    𝑡( =

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