Future value with compound interestKey formula
- future value
- principal (the starting amount)
- interest rate per year as a decimal (40% = 0.40)
- number of years
interest is paid on the growing balance, not just on the original principal.
İKT225 · 3 formulas from 1 lectures
Formula sheet
Every key formula from the lectures, in one place. Read it the night before the exam, or print it.
02 Vectors and Effective Rates
Effective annual rateKey formula
- quoted (nominal) annual rate as a decimal
- number of compounding periods per year
two offers quote rates with different payment frequencies and you need to compare what they really pay.
Rule of 70Approximation
- growth rate in percent per year (write 7, not 0.07)
- years to double
you need a quick doubling time for GDP, prices, population or an investment growing at a steady rate.