Question:
What is the future value of a $1,000 investment after 10 years if it pays an interest rate of 12% compounded annually?
Compound Interest:
When one uses a compounding interest rate, interest is charged on interest. An interest rate can be compounded continuously, monthly, quarterly, semiannually, or annually.
See Also
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The future value of $1,000 in 10 years will be $3,105.85.
We know that:
Future value = {eq}PV * (1 + i)^{n}{/eq}
Where,
- PV = Present value
- i =...
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