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Simple Vs Compound Interest

The document compares the future value of an initial investment of $65,000 over 40 years using simple vs compound interest at a rate of 15% per year. It shows that with compound interest the future value is much higher, reaching over $17 million after 40 years compared to around $6.5 million with simple interest.

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Kaushik Samanta
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26 views6 pages

Simple Vs Compound Interest

The document compares the future value of an initial investment of $65,000 over 40 years using simple vs compound interest at a rate of 15% per year. It shows that with compound interest the future value is much higher, reaching over $17 million after 40 years compared to around $6.5 million with simple interest.

Uploaded by

Kaushik Samanta
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLS, PDF, TXT or read online on Scribd
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65000

15%

Period
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38

FV (Simple Interest) FV (Compound Interest)


65,000.00
65,000.00
74,750.00
74,750.00
84,500.00
85,962.50
94,250.00
98,856.88
104,000.00
113,685.41
113,750.00
130,738.22
123,500.00
150,348.95
133,250.00
172,901.29
143,000.00
198,836.49
152,750.00
228,661.96
162,500.00
262,961.25
172,250.00
302,405.44
182,000.00
347,766.26
191,750.00
399,931.20
201,500.00
459,920.87
211,250.00
528,909.01
221,000.00
608,245.36
230,750.00
699,482.16
240,500.00
804,404.48
250,250.00
925,065.16
260,000.00
1,063,824.93
269,750.00
1,223,398.67
279,500.00
1,406,908.47
289,250.00
1,617,944.74
299,000.00
1,860,636.45
308,750.00
2,139,731.92
318,500.00
2,460,691.71
328,250.00
2,829,795.46
338,000.00
3,254,264.78
347,750.00
3,742,404.50
357,500.00
4,303,765.18
367,250.00
4,949,329.95
377,000.00
5,691,729.45
386,750.00
6,545,488.86
396,500.00
7,527,312.19
406,250.00
8,656,409.02
416,000.00
9,954,870.38
425,750.00
11,448,100.93
435,500.00
13,165,316.07

Pick a Year:

Future Value

PV
Rate

33

20,000,000.00
33.00

Compound vs Simple In
0.00 8% per year for 40 Y

33.00 386750.00
18,000,000.00
33.00
16,000,000.00

###

14,000,000.00
12,000,000.00
10,000,000.00
8,000,000.00
6,000,000.00
4,000,000.00
2,000,000.00
0

10

15

20

Years
FV (Simple Interest)

This workbook is Copyright 2007 by Timothy R. M

Please visit http://www.tvmcalcs.com/ for free time v


calculator, and Microsoft Excel tutorials.

39
40

445,250.00
455,000.00

15,140,113.48
17,411,130.51

Compound vs Simple Interest


8% per year for 40 Years

6,545,488.86

386,750.00
5

10

15

20

25

30

35

Years
FV (Simple Interest)

FV (Compound Interest)

ght 2007 by Timothy R. Mayes, Ph.D.

mcalcs.com/ for free time value of money, financial


Excel tutorials.

40

33

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