future value

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The value that a sum of money (the present value) invested at compound interest will have in the future. If the future value is F, and the present value is P, at an annual rate of interest r, compounded annually for n years, F = P(1 + r)n. Thus a sum with a present value of £1000 will have a future value of £1973.82 at 12% p.a., after six years.

Subjects: Financial Institutions and Services.

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