Chapter 3 Time Value of Money
The formula for calculating the future value (FV) of a sum is: FV = P × (1 + r)n. FV = $100 × (1 + 10%)2 = $121 1.2.2 Sometimes financial transactions take place on the basis that interest will be calculated more frequently than once a year. 1.2.3 EXAMPLE 2. If you put $100 in a bank account earning 12% per annum, then your return after one ... ................
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