Lecture 2: FV, PV, Compounding

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Last updated 4:13 AM on 9/24/25
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5 Terms

1
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What is the future value formula?

The total amount due at the end of the investment

  • FV = PV (1+r)

2
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What is the present value formula?

The amount a borrower would need to set aside today to meet the promised payment

  • PV = FV / (1+r)

3
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What is compounding/compound interest?

The interest earned is higher each year because you earn interest on interest

4
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How do you find how long the wait time of an investment is?

Use algebra and then use log!

<p>Use algebra and then use log!</p><p></p>
5
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How do you find the interest rate for an investment?

Use algebra and then use the square root / inverse power

<p>Use algebra and then use the square root / inverse power</p>