How do you find the initial investment in compound interest?

How do you calculate initial investment?

Write out the formula for interest, F = P(1 + i)^n. F is the final amount. P is your initial (or principle) investment. i is the interest rate (should be written in decimal form).

How do you find the initial value of compound interest?

P = A / (1 + r/n) nt

  1. P = principal amount (initial investment)
  2. A = value after t periods.
  3. r = annual interest rate.
  4. n = number of times the interest is compounded per year.
  5. t = number of years the money is borrowed for.

How do you calculate initial investment in NPV?

What is the formula for net present value?

  1. NPV = Cash flow / (1 + i)t – initial investment.
  2. NPV = Today’s value of the expected cash flows − Today’s value of invested cash.
  3. ROI = (Total benefits – total costs) / total costs.

What is the formula of compound interest with example?

Derivation of Compound Interest Formula

Simple Interest Calculation (r = 10%) Compound Interest Calculation(r = 10%)
For 5th year: P = 10,000 Time = 1 year Interest = 1000 For 5th year: P = 14641 Time = 1 year Interest = 1464.1
Total Simple Interest = 5000 Total Compount Interest = 6105.1

How is investment interest calculated?

The simplest formula to use is to subtract the original (principal) investment amount from the year-end (terminal) investment value. For example: Terminal = R110,000; principal = R100,000; difference = R10,000. The total “interest” earned, therefore, would be R10 000.

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