Naming Conventions in Interest Formulas
There are six standard formulas for converting money at one time to money at another time. Table 5.1 shows the names and meanings of the variables used in those formulas. These variables and their meanings are used commonly throughout business, finance, and engineering.
| Name | Meaning |
|---|---|
| P | The principal amount. How much is the money worth right now? This term is also known as the present value or present worth. |
| F | The final amount. How much will the money be worth at a later time? This term is also known as the future value or future worth. |
| i | The interest rate per period. What is the rental fee for using someone else's money? (Assumed to be ... |
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