Q: How does compound interest affect the future value of an investment?

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What effect do interest rates have on the calculation of future and present value, how does the length of time affect future and present value, how do these two factors correlate.

It depends how the interest is calculated. If it's compounded, your initial 500 investment would be worth 638.15 after 5 years.

Simple interest, 500 + (5 x 5 x 4) = 600. Compound 500 x 1.04^5 = 632.66

Future Value = (Present Value)*(1 + i)^n {i is interest rate per compounding period, and n is the number of compounding periods} Memorize this.So if you want to double, then (Future Value)/(Present Value) = 2, and n = 16.2 = (1 + i)^16 --> 2^(1/16) = 1 + i --> i = 2^(1/16) - 1 = 0.044274 = 4.4274 %

Future value= 25000*(1.08)10 =53973.12

Related questions

The more often interest is compounded (the shorter the interval), the faster the total value of the investment grows, and the more it's worth after any given period of time.

No, the future value of an investment does not increase as the number of years of compounding at a positive rate of interest declines. The future value is directly proportional to the number of compounding periods, so as the number of years of compounding decreases, the future value of the investment will also decrease.

What effect do interest rates have on the calculation of future and present value, how does the length of time affect future and present value, how do these two factors correlate.

an investment in the future

$1480.24

The interest rate is the thing that primarily affects the investment demand curve and an increase in investment indicates a decrease in real interest rate. This makes sense because it is better for borrowers to pay a lower interest rate. Also, better technology can cause the investment demand curve to shift out, also high inventories. If interest rates are expected to be higher in the future, firms will choose to invest now and the lowering of business taxes will result in the investment demand curve to shift outwards.

It is a financial function. It returns the future value of an investment based on an interest rate and a constant payment schedule. So if you are paying in a set amount on a regular basis, like every month, and there is a fixed interest rate, it can work out how much your investment will be worth. See the link below for more details.

Decision makers desire a degree of certainty in their future in order to make decisions about investment and other expenditure. Interest rate volatility precludes such a scenario.

The FV function calculates the future value of an investment.

How can safe to investment to depositer how can depositer investment to risk to long time how can company profitable and distribut to depositer high interest for depositer investment to 10% p.m. Company working to rbi how can future to company

My question is......can we Americans pool OUR money together for future investment legally?

At 2% compound interest, it will be 134,586.83 dollars - at today's prices. What inflation will do its real value is anyone's guess.