Posted in August 2010

On Compound Interest – Closed-Form Solutions II

Annual Compounding In part one a formula for compound interest based on monthly deposits was discussed. The equations are based on monthly compounding which, as already stated in the previous post, is rather uncommon for the area I live in (at least as far as standard saving accounts are concerned). To overcome this shortcoming we … Continue reading

On Compound Interest – Closed-Form Solutions

Introduction and Monthly Compounding Wikipedia describes compound interest as Compound interest arises when interest is added to the principal, so that from that moment on, the interest that has been added also itself earns interest. In its most simple form the compound future value, , of a present value, , in -periods from now at … Continue reading