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interest rate and number of periods in years. The interest rate and number of periods need to be expressed in annual terms, since the length is presumed to be in years. From there you can solve for the future value. The equation reads: ...
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Insert these values into the following formula: L times (1 + i)^h = F. F represents the total amount owed on the loan, including the compound interest. Step 3 Solve the formula for F. If you only want to know the amount of interest that has accrued independent of the initial value ...
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Simple interest compared to compound interest is easily calculated by using the formula: I=PrtI=Prt Here the variables represent: I = interest amount P = principle amount r = annual interest rate t = time Plug in all your values and solve for the variable that you need. ...
The important thing to remember here is the number of compounding periods you want to solve for. What is the formula for simple interest? The simple interest formula is the following: A = P(1+rt) Here is how to do the math: P is your initial investment amount ...
aWe have shown how to manipulate cash flows in variety of ways, and in so doing we can now solve many kinds of compound interest problems. But engineering economic analysis is more than simply solving interest problem. The decision process requires that outcomes in terms of the selection criteri...
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