Compound Interest, Future Value, and Present Value, 10 Percent Interest Rate (1) (2) Computation (3) Total Interest (4) Beginning Period Value End Period Value $1,000 (Year 1) $1,000 x 1.10 = $1,100 $100 $1,100 (= $1,000 + $100) $1,100 (Year 2) $1,100 x 1.10 = $1,210 $210 (= $100 + $110) $1,210 (= $1,000 + $210) $1,210 (Year 3) $1,210 x 1.10 = $1,331 $331 (= $100 + $110 + $121) $1,331 (= $1,000 + $331)
Compound Interest, Future Value, and Present Value, 10 Percent Interest Rate (1) (2) Computation (3) Total Interest (4) Beginning Period Value End Period Value $1,000 (Year 1) $1,000 x 1.10 = $1,100 $100 $1,100 (= $1,000 + $100) $1,100 (Year 2) $1,100 x 1.10 = $1,210 $210 (= $100 + $110) $1,210 (= $1,000 + $210) $1,210 (Year 3) $1,210 x 1.10 = $1,331 $331 (= $100 + $110 + $121) $1,331 (= $1,000 + $331)
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
As shown in Table, $1,000 invested at 10 percent
Transcribed Image Text:Compound Interest, Future Value, and Present Value, 10 Percent Interest Rate
(1)
(2)
Computation
(3)
Total Interest
(4)
Beginning Period Value
End Period Value
$1,000 (Year 1)
$1,000 x 1.10 = $1,100
$100
$1,100 (= $1,000 + $100)
$1,100 (Year 2)
$1,100 x 1.10 = $1,210
$210 (= $100 + $110)
$1,210 (= $1,000 + $210)
$1,210 (Year 3)
$1,210 x 1.10 = $1,331
$331 (= $100 + $110 + $121)
$1,331 (= $1,000 + $331)
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