Future Value (HSC SSCE Mathematics Standard): Flashcards

Interest on both initial principal and accumulated interest

Earning interest on interest

$FV = PV(1 + r)^n$

$PV = \frac{FV}{(1 + r)^n}$

Interest rate per compounding period as a decimal

Total number of compounding periods

Divide rate by 12, multiply years by 12

$I = FV - PV$

Divide by 100

FV should always be larger than PV