Simple Interest Simple Interest
in Business Finance(Business Finance)
Study Guide
Study this set o nline at: https://www.cram.co m/flashcards/simple-interest-business-
finance-13153621
F uture val ue i s the amount to whi ch an i nvestment wi l l grow af ter earni ng i nterest.
i s the amount you have to i nvest today i f you want to have a certai n amount of cash
Present val ue
f l ow i n the f uture.
compoundi ng f uture val ue i s computed usi ng
di scounti ng present val ue i s computed usi ng
present val ue approach when maki ng i nvestment deci si ons, i nvestors usual l y adopt the
the amount of i nterest i s computed onl y once duri ng the term of the i nvestment or
Si mpl e I nterest borrowi ng regardl ess of whether the term i s l ess than one year, equal to one year, or
more than one year.
I = Prt F ormul a f or i nterest
P = I /Rt F ormul a f or Pri nci pal
in Business Finance(Business Finance)
Study Guide
Study this set o nline at: https://www.cram.co m/flashcards/simple-interest-business-
finance-13153621
F uture val ue i s the amount to whi ch an i nvestment wi l l grow af ter earni ng i nterest.
i s the amount you have to i nvest today i f you want to have a certai n amount of cash
Present val ue
f l ow i n the f uture.
compoundi ng f uture val ue i s computed usi ng
di scounti ng present val ue i s computed usi ng
present val ue approach when maki ng i nvestment deci si ons, i nvestors usual l y adopt the
the amount of i nterest i s computed onl y once duri ng the term of the i nvestment or
Si mpl e I nterest borrowi ng regardl ess of whether the term i s l ess than one year, equal to one year, or
more than one year.
I = Prt F ormul a f or i nterest
P = I /Rt F ormul a f or Pri nci pal
