Principles of Corporate Finance

(Barry) #1

Compound Interest


i ii iii iv v
Periods Interest Value Annually
per per APR after compounded
year period (i x ii) one year interest rate
1 6% 6% 1.06 6.000%
2 3 6 1.03^2 = 1.0609 6.090
4 1.5 6 1.015^4 = 1.06136 6.136
12 .5 6 1.005^12 = 1.06168 6.168
52 .1154 6 1.001154^52 = 1.06180 6.180
365 .0164 6 1.000164^365 = 1.06183 6.183

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