Sunday, February 25, 2007

Playing With Numbers Again

A=P x [e rt]
A=P x [{1+(r/n}exponent n x t]
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A=P x [1+{(r/n)exponent n x t}]

P=$100.00
n=compounded Annually
t=1 year
r=30%=.03

1st year
A=$100.00 x [{1 + (.03/1)} exponent 1 x 1]
A=$103.00

2nd year
A=$103.00 x [{1 + (.03/1)} exponent 1 x 1]
A=$106.09

3rd year
A=$106.09 x [{1 + (.03/1)} exponent 1 x 1]
A=$109.27

4th year
A=$109.27 x [{1 + (.03/1)} exponent 1 x 1]
A=$112.55

5th year
A=$112.55 x [{1 + (.03/1)} exponent 1 x 1]
A=$115.93
_________________________________________________

Change t=1 year to t=5 yrs

A=$100 x [{1 + (.03/1)} exponent 1 x 5]
A=$115.93
_________________________________________________

A=P x [e rt]
A=$100 x [e exponent {.03 x 5}]
A= $116.18

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