How to Calculate Compound Interest

FV = P(1 + r)n => this yields your formula for future value
FV= Future Value
P= Your Principal investment
r= Your rate of return expressed as a decimal (5% expressed as 0.05)
n= number of years you want to know(calculate as a power of)

Get your calculator (some calculators already have this formula; just plug in numbers)
If not, you must first perform parenthesses calculation first (1+r)
Ex: (1+0.05)= 1.05

So, your formula now looks like this FV=P(1.05)n

Next, put in your Principal amount. Let's say $1000 is your principal amount.
Your formula now looks like this FV=1000(1.05)n We are almost done!
Now put in the number of years. Let's say 10 years.
So, FV=1000(1.05)10 and that is 1.05 to the tenth power.

Your calculator on your desktop will handle this quite well. Switch over to scientific mode. Put in 1.05 then press the x^y key and then enter 10. This will give you 1.62889462675(according to my accounting calculator) round to 1.63.

Now, FV=1000(1.63) and 1000 multiplied by 1.63= 1630.
So, in 10 years you will have gained $630 in interest compounded.

For more information please view WWW.QUICK-INVESTMENT.COM