Transcript Simple Interest $1000 at 8%/yr

Simple Interest
$1000 at 8%/yr
End
of Year
1
2
3
4
5
6
7
8
9
10
Future
Value
$1080.00
$1166.40
$1259.71
$1360.49
$1469.33
$1586.87
$1713.82
$1850.93
$1999.00
$2158.92

Annual Interest
Principal P invested at r %/yr
Year
Balance
Forward
Interest
0
Future Value
P
1
P
r*P
(1 + r) * P
2
(1 + r) * P
r * (1 + r) * P
(1 + r)2 * P
3
(1 + r)2 * P
r * (1 + r)2 * P
(1 + r)3 * P
4
(1 + r)3 * P
r * (1 + r)3 * P
(1 + r)4 * P
n
(1 + r)n-1 * P
r * (1 + r)n-1 * P
(1 + r)n * P
Simple Interest
$1000 at 8%/yr
•The future value of Principal P invested at r%
compounded k-times each year, at the end of n years
Fn = Value in year n = (1 + r/k)nk * P.
•Compounded continuously
Fn = Value in Year n = P * ert,