Concept explainers
Future Value
Suppose you have a certain amount of money in a savings account that earns compound monthly interest, and you want to calculate the amount that you will have after a specific number of months. The formula, which is known as the future value formula, is
The terms in the formula are as follows:
- F is the future value of the account after the specified time period.
- P is the present value of the account.
- i is the monthly interest rate.
- t is the number of months.
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