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Unformatted text preview: FV  PV  PV rt A Quick Illustrative 6 Simple Interest Compound Interest Future Value FV = PV(1+ rt ) FV = PV(1+ r ) t Present Value PV = FV/(1+ rt ) PV = FV/(1+ r ) t Total Interest FV  PV FV  PV Simple Interest PV rt PV rt Compound Interest N/A FV  PV  PV rt Principal $10,000 Simple Interest Compound Interest Rate 0.05 Future Value $13,500 $14,071 Time 7 Present Value $10,000 $10,000 Total Interest $3,500 $4,071 Simple Interest $3,500 $3,500 Compound Interest $0 $571 Variations of the Formula • If FV = PV(1 + r ) t and PV = FV/(1 + r ) t , the algebraic rearrangements to solve for r and t are: 7...
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 Spring '12
 VictorWakeling
 Time Value Of Money, $0, $3,500, $13,500, $4,071, $14,071

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