Calculating compound interest on investments?
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bryon
Apprentice
Joined: 28 Aug 2006
Posts: 9
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 Posted: 04/20/08 - 09:57 Post subject: |
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| Hello there everybody. My name is Sam and I would like to know something about compound interest. Can you tell me how is calculating compound interest on investments done? I would like to invest some money, so this is something that got me interested. Thank you in advance for your posts. |
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austen
Apprentice
Joined: 05 Jan 2007
Posts: 10
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| Posted: 05/19/08 - 22:45 Post subject: |
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| Hello Sam. Well, I find a little bit difficult to explain how it works here, because you have to apply a little bit complicated formula. But, I’ll see what I can do to help you. What you have to first is to calculate present value and future value of your loan, having in mind period during which you’re paying it back. Compound interest rate on investment is calculated as a square root of division between future value and present value minus one. Future and present value are also used in another formula to determine number of periods. Well, that is all I can tell you. I am sorry if I haven’t been much clear about the subject. Take care! |
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