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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

It can secure your retirement, you can use the power of compound interest, and of course for future benefits and peace of mind:)

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.

yes

an investment in the future

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.

$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.

The FV function calculates the future value of an investment.

there is negative relationship between interest rate and investments means that as interest rate falls investment rises.And the opposite is true when interest rate rises. Real interest rate helps to determine the trend of investment in an economy. When the interest rates are high, borrowing becomes quite expensive for the investors so they make less real investment. The high interest rates make it difficult to cover their expenditure because their products becomes less competitive in both the domestic and international market. On the other hand, if the interest rate is low, more and more investment take place in the economy which result in more production, more employment opportunities and increase in the potential GDP. Thus the real interest rate through their effect on investment improves growth and future living standards of a nation.

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.

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

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

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