Variables used in this chapter:
A = FUTURE VALUE
This is the principal plus interest.
P = PRESENT VALUE
This is the same as the principal.
r = INTEREST RATE
This is the annual interest rate.
t = TIME This
is the time in years.
n = NUMBER OF COMPOUNDING PERIODS EACH YEAR
N = nt This
is the number of compounding periods.
i = r/n
This is the rate per period
I = Prt
Future value formula (simple):
A = P(1 + rt)
Future value formula (compound): A = P(1
Future value formula (simple): A
For present value solve for P.