Simple Interest - with Inflation
PV = present value
i = interest rate
n = period in years
WHAT IS IT ?
Simple interest is interest calculated periodically exclusively on the principal of a loan or investment, without including previously earned interest.
CALCULATION:
Enter fixed costs
Enter variable costs
Enter the price of the product or service
EXAMPLE:
The interest rate is 5% per year. We deposited 10,000 Euros into the bank. We withdraw the interest each time. We do this for 5 years.
So we substitute the values into the formula above
FV=10000*(0.05*5),
FV=12500
After 5 years, we have saved 12,500 Euros with the principal (assuming we withdrew the interest). Otherwise, see compound interest
YOU MIGHT BE INTERESTED:
COMMENTS:
