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CInterest
- Thread starter Saumyojit
- Start date
D
Deleted member 4993
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Q1: How did the formula came?................................................................ from compound interest equation that you have learned beforePresent worth of Rs. x due T years hence is given by
Present Worth (PW) = x/(1+R/100)^T
q2: present worth of Rs. x due T years hence : Meaning of this line ?
Do you know the meaning of "present worth"? If not please look it up in your textbook or class notes.
Do you know the meaning of "due T years hence"? If not please look it up in your textbook or class notes.
Q3: is x the principle or amount?
What are the differences between the terms principle or amount?
I explained the relationship between present and future value back in this thread.
https://www.freemathhelp.com/forum/threads/compound-interest.120239/
But you wanted to argue rather than understand.
The r/100 is just to turn the percent into a decimal.
The general formula is:
[MATH]f = p(1 + i)^n, \text {where}[/MATH]
[MATH]f = \text {FUTURE value,}[/MATH]
[MATH]p = \text {PRESENT value;}[/MATH]
[MATH]i = \text {INTEREST rate for compounding period expressed as a decimal; and}[/MATH]
[MATH]n = \text {NUMBER of compounding periods.}[/MATH]
And obviously [MATH]f = p(1 + i)^n \iff p = \dfrac{f}{(1 + i)^n}.[/MATH]
https://www.freemathhelp.com/forum/threads/compound-interest.120239/
But you wanted to argue rather than understand.
The r/100 is just to turn the percent into a decimal.
The general formula is:
[MATH]f = p(1 + i)^n, \text {where}[/MATH]
[MATH]f = \text {FUTURE value,}[/MATH]
[MATH]p = \text {PRESENT value;}[/MATH]
[MATH]i = \text {INTEREST rate for compounding period expressed as a decimal; and}[/MATH]
[MATH]n = \text {NUMBER of compounding periods.}[/MATH]
And obviously [MATH]f = p(1 + i)^n \iff p = \dfrac{f}{(1 + i)^n}.[/MATH]
Yes. but the standard vocabulary is "present value" and "future value."That means X is the future value or amt that is owned for n years and I need to give it back.
Principal is the present worth
D
Deleted member 4993
Guest
Your question was:That means X is the future value or amt that is owned for n years and I need to give it back.
Principal is the present worth
q2: present worth of Rs. x due T years hence : Meaning of this line ?
So what do you think the meaning of the line was?
and the next question you asked was:
Q3: is x the principle or amount?
What are the differences between the terms principle or amount?