MATHEMATICS OF VALUATION EXAMPLES E-BOOK
To find the amount to which Rs.1/will accumulate at the end of a given term at compound interest( Future Value)
i= Interest per annum on Rs.1/
Then Rs.1/ invested now will accumulate to (1+i) at the end of first year.
The amount of Rs.1/at the end of 2nd year will be
= (1+i)+ i.(1+i)
= 1+ i+ i+ i2
= 1+ 2 i + i2
=1× (1+ i) 2
Similarly, the amount of Rs.1/ at the end of 3rd year will be =1× (1+ i) 3
Similarly, the amount of Rs.1/ at the end of nth year will be=A= 1× (1+ i) n
Similarly, if the present amount is Rs. PV/ then at the end of nth year Future
( FV)will be= ………..
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