Personal Finance (MCS 2100) - Equations

MCS 2100 -

EQUATIONS




SUMMER SEMESTER

OF 2021

, Chapter 1 - Introduction
simple interest :



l>
I =P IR ) (T)
↳ P Amount ↳ R Annual interest rate ↳ 1-
=
in
savings
= =
Time period
.
Future value ( FV ) :



^
↳ FV =
PV I 1 + it
↳
↳ PV =
Present value i = Interest rate ↳ n =
Number of time periods
nm
↳
When FV =P V11
i
/ m)
compounding is more than once a year : +




↳ m
Number of
compounding periods per year
=




Number of years
↳
n =




Future value of an Annuity
•




41 In
]
↳ I
+
i -



FU =



i



Present Value :
'




↳
pv = FV :-( I + i )n

Present value of an Annuity
-

:




[
it ]
]
↳
pv =
1 -
[1 ÷ 11 +




i