Simple interest:
𝐼 =𝑃×𝑅×𝑁
Where:
-
I  Interest (how much the invest will increase or decrease by)
P  Principal (Initial amount invested or initial value)
R  Rate (in %, p.a. which means per annum, yearly)
N  How long you invest for (normally in years for simple interest)
𝐹𝑉 = 𝑃 + 𝐼
Where:
-
FV  Future Value
P  Principal
I  Interest
Compound interest:
𝑟 𝑛×𝑎
𝐹𝑉 = 𝑃𝑉 × (1 + )
𝑎
Where:
-
FV  Future value
PV  Present value
r  rate (dependent on frequency of compounding in a year)
n  number of periods on investment (also based on frequency of compounding)
a  is the ‘factor’ of compounding, e.g. when compounding:
o Yearly, 𝑎 = 1
o Biannually, 𝑎 = 2
o Quarterly, 𝑎 = 4
o Fortnightly, 𝑎 = 26
o Monthly, 𝑎 = 12
o Weekly, 𝑎 = 52
o Daily, 𝑎 = 365
-
NOTE: For depreciation, it will be (1 − 𝑎) in the FV formula above
𝑟
𝐼 = 𝐹𝑉 − 𝑃𝑉