Question

All compound interest equations consist of what four variables? To solve for one variable, how many others must we know?

Answer 1

Future Value = Present Value*[{1+(Interest Rate/Number of times compounded in a year)}^{Number of times compounded in a year*Number of Years}]

Compound Interest = Future Value-Present Value

Accordingly, All Compound Interest Equations of 4 variables viz.

(i) Present Value i.e. Principal

(ii) Interest Rate

(iii) Number of times, Interest is compounded in a year

(iv) Number of Years i.e. Time Period

To solve for one variable, we must know (i) All the other 3 variabes AND ALSO (ii) Either Future Value(amount) or Compound Interest(amount)