Compound Interest

Future value of compound interest:

F  P 1  i 
n

Where P= Principal
i= interest rate per period
N= total no. of periods

Sayma Suraiya: Assistant Professor: Daffodil International University

Example: Compute the Future value if $70,000 is invested for 5 years at 9% compounded annually.
Solution:

If we compute the future value using the rest of the interest rates then we have,
2) Compounded semi-annually then,

Here, P=$70,000
i= 9%=.09/2=
N= 5 yrs =5*2
=10 times

Sayma Suraiya: Assistant Professor: Daffodil International University