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how to calculate compound interest maths literacy. 2 13 Calculate the value of the investment at the end of the five and a. BANKING INFLATION Key Focus Identify the different types of bank accounts Perform calculations involving simple and compound interest Define and calculate the effect of inflation X-planation.
A P 1 i n Where. In other words if you compound annually every year the interest for the second year is calculated on the original amount PLUS the interest made in the first year. Total interest earned 544195584 4000 144195584.
FV Future value.
The general formula for calculating simple interest is. Total interest earned 544195584 4000 144195584. Compound interest is calculated with the formula of A equals P times one plus R over N to the Nth power. To calculate the amount of simple interest over 5 years you simply multiply the interest earnt in year one by five - 125 5 625.