Compound Interest Formulas and Notation: Future Value, Present

438 Chapter 9 1 Compound Interest 9 Summary of Notation and Formulas NOTATION FV = Future value (maturity value or accumulated value) = Periodic rate of Interest (Interest rate per of a loan or Investment compounding perlod) PV = Present value (discounted value or principal = Number of compounding periods per year amount) of a loan or Investment (compounding frequency) = Amount of compound Interest of a loan or 1 = Number of compounding periods during the term Investment = Time perlod or term In years = Nominal (stated or quoted) annual Interest rate = Effective Interest rate (annually compounding rate) Number of Compoundinga Per Year (Compounding Frequency, mr) Compounded Compounded Compounded compounded Compounded Annually Semi-annually Quarterly Monthly Dally (every year) (every 6 monthe) [every 3 months] (every month) (every day) PAT = 2 IN =4 m = 12 IN = 365