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How do you calculate compound annual interest rates? - Answers
Finishing capital = starting capital x (1 plus interest rate) to the power of the term. EG 1000 units at 5% over 7 years = 1000 x (1.05 to the power 7) Easiest way to do this is to use logarithms: 1000 x antilog (7 x log 1.05) = 1000 x antilog 0.1483251 = 1000 x 1.4071 = 1407.1 units This compares with simple interest where finishing capital would be 1350 units.
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How do you calculate compound annual interest rates? - Answers
Finishing capital = starting capital x (1 plus interest rate) to the power of the term. EG 1000 units at 5% over 7 years = 1000 x (1.05 to the power 7) Easiest way to do this is to use logarithms: 1000 x antilog (7 x log 1.05) = 1000 x antilog 0.1483251 = 1000 x 1.4071 = 1407.1 units This compares with simple interest where finishing capital would be 1350 units.
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How do you calculate compound annual interest rates? - Answers
Finishing capital = starting capital x (1 plus interest rate) to the power of the term. EG 1000 units at 5% over 7 years = 1000 x (1.05 to the power 7) Easiest way to do this is to use logarithms: 1000 x antilog (7 x log 1.05) = 1000 x antilog 0.1483251 = 1000 x 1.4071 = 1407.1 units This compares with simple interest where finishing capital would be 1350 units.
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- og:descriptionFinishing capital = starting capital x (1 plus interest rate) to the power of the term. EG 1000 units at 5% over 7 years = 1000 x (1.05 to the power 7) Easiest way to do this is to use logarithms: 1000 x antilog (7 x log 1.05) = 1000 x antilog 0.1483251 = 1000 x 1.4071 = 1407.1 units This compares with simple interest where finishing capital would be 1350 units.
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