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How Compound values can be calculated on anannual basis
Compound values can be calculated on anannual basis, or on a half-yearly basis or on a monthly basis or on continuous basis or on any other basis you may so desire. This is as the formula takes into consideration a specific time period and interest rate for that time period only.
To calculate these values would be very tedious and would require scientific calculators. To ease our jobs there are tables developed which can take care of interest factor calculations so that our formulas can be written as:
Future Value = (Investment or Present Value) * (Future Value Interest Factor n, i)
Where n = no of time periods and i = is the interest rate.
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how do we get the pvif of a perpetuity
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