If you invest $2,000 at the end of each year for five years and earn 7% interest compounded annually, you have accumulated at the end of the fifth year will be $ 11,501 Investment Future Value.
Compound Interest
The interest that is calculated using both the principal and the interest that has accrued during the previous period is called compound interest. It differs from simple interest in that the principal is not taken into account when determining the interest for the subsequent period with simple interest.
Interest that is calculated on both the initial lump sum and the interest that has previously accrued is known as compound interest. If a lump amount (PV) is placed in an account earning a rate of compound interest, it will eventually increase in value over a period of time (n) (FV).
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