Posts Tagged ‘Compound Interest’

Problem 899

Use the compound interest formula to find the future value A, for the following values.

P = 3000

i = 0.09

n = 35

 

Solution:-

 

A = P(1+i)n

Using the compound interest formula, replace the unknowns with corresponding values.

A = 3000(1+0.09)35

Calculate the future value.

A = 61241.9

 

Present Value for Compound Interest

Present Value for Compound Interest

 

The present value of A dollars compounded at an interest rate I per period for n periods is

P = \frac{A}{(1+i)^{n}} or P = A(1+i)^{-n}.