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    Simple Interest Calculation

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    Beybi Esteban
    This document contains information about simple interest, compound interest, and the rule of 72 as it relates to doubling investments. It provides sample calculations for simple interest over 1 year at 3% annual interest. It also shows a monthly compound interest calculation over 12 months at 3% annual interest. Finally, it demonstrates the rule of 72 and compares actual years required to double investments for various annual interest rates ranging from 1% to 30%.

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    Simple Interest Calculation

    Uploaded by

    Beybi Esteban
    38 views7 pages
    This document contains information about simple interest, compound interest, and the rule of 72 as it relates to doubling investments. It provides sample calculations for simple interest over 1 year at 3% annual interest. It also shows a monthly compound interest calculation over 12 months at 3% annual interest. Finally, it demonstrates the rule of 72 and compares actual years required to double investments for various annual interest rates ranging from 1% to 30%.

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    Investment Calculations

    Original Title

    Investment Calculations

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    This document contains information about simple interest, compound interest, and the rule of 72 as it relates to doubling investments. It provides sample calculations for simple interest over 1 year at 3% annual interest. It also shows a monthly compound interest calculation over 12 months at 3% annual interest. Finally, it demonstrates the rule of 72 and compares actual years required to double investments for various annual interest rates ranging from 1% to 30%.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    38 views7 pages

    Simple Interest Calculation

    Uploaded by

    Beybi Esteban
    This document contains information about simple interest, compound interest, and the rule of 72 as it relates to doubling investments. It provides sample calculations for simple interest over 1 year at 3% annual interest. It also shows a monthly compound interest calculation over 12 months at 3% annual interest. Finally, it demonstrates the rule of 72 and compares actual years required to double investments for various annual interest rates ranging from 1% to 30%.

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    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
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    Simple Interest Calculation

    Investment amount: $1,000.00


    Annual interest rate: 3.00%
    Investment term (years): 1.00

    Interest: $30.00
    Investment at the end of the term: $1,030.00
    Compound Interest Calculation
    Monthly compounding

    Investment amount: $1,000.00


    Annual interest rate: 3.00%
    Investment term (months): 12

    Month Interest Balance


    Earned
    Beginning Balance $1,000.00
    1 $2.50 $1,002.50
    2 $2.51 $1,005.01
    3 $2.51 $1,007.52
    4 $2.52 $1,010.04
    5 $2.53 $1,012.56
    6 $2.53 $1,015.09
    7 $2.54 $1,017.63
    8 $2.54 $1,020.18
    9 $2.55 $1,022.73
    10 $2.56 $1,025.28
    11 $2.56 $1,027.85
    12 $2.57 $1,030.42 $1,030.42 <-- single formula
    <-- single formula
    Compound Interest Calculation
    Single formula general solution

    Investment amount: $5,000.00


    Annual interest rate: 4.25%
    Compounding periods/year 365
    Term (years) 3

    Periodic interest rate: 0.0116%


    Investment value at end of term: $5,679.88
    Total interest earned: $679.88

    Annual yield: 4.53%


    Continuous Compounding

    Investment amount: $5,000.00


    Annual interest rate: 4.25%
    Compounding Continuous
    Term (years) 3

    Investment at end of term: $5,679.92


    Years required to double an investment
    Rule of 72 Actual
    80.00
    1% 72.00 69.66
    2% 36.00 35.00 70.00
    3% 24.00 23.45
    60.00
    4% 18.00 17.67
    5% 14.40 14.21 50.00
    6% 12.00 11.90 40.00
    7% 10.29 10.24
    8% 9.00 9.01 30.00

    9% 8.00 8.04 20.00


    10% 7.20 7.27
    10.00
    15% 4.80 4.96
    20% 3.60 3.80 0.00
    1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 15%
    25% 2.88 3.11
    Rul e of 72 Actua l
    30% 2.40 2.64
    7% 8% 9% 10% 15% 20% 25% 30%
    of 72 Actua l

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