PV = present value

i = interest rate

n = period in years

Simple interest is interest calculated periodically exclusively on the principal of a loan or investment, without including previously earned interest.

Enter fixed costs

Enter variable costs

Enter the price of the product or service

The interest rate is 5% per year. We deposited 10,000 Euros into the bank. We withdraw the interest each time. We do this for 5 years.

So we substitute the values into the formula above

FV=10000*(0.05*5),

FV=12500

After 5 years, we have saved 12,500 Euros with the principal (assuming we withdrew the interest). Otherwise, see compound interest

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