Economics
Compound interest future value
Compound interest future value is the amount that present capital or a stream of payments grows to by the end of a term.
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S = P(1 + r/100)ᵗ
- 01Given
- 02Calculation
- 03Answer
What it means
Compound-interest future value is the capital at the end of a term when earned interest remains invested, is added to the principal, and begins earning returns itself.
How it works and where it is used
It is used for compounding deposits, investments, savings, and debt. Unlike simple interest, the interest base grows after every compounding period.