Archive:Business finance: Difference between revisions
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Revision as of 03:27, 22 November 2006
The Time Value of Money
Some Future Value Definitions
• Future Value (FV): The amount an investment is worth after one or more periods. • Simple Interest: Interest earned only on the original principal amount invested. More Future Value Definitions • Compound Interest: Interest earned on both the initial principal and the interest reinvested from prior periods. • Compounding: The process of accumulating interest on an investment over time to earn more interest.