Return on Software: Maximizing the Return on Your Software Investment

Continuous Compounding, Discrete Payment

You may need to consider what happens when the compounding period approaches 0; in other words, the compounding occurs continuously (r = nominal interest rate per period, n = number of periods). These situations are relatively rare, so only the formulas are given below, not their derivations. A discussion of the derivations of these formulas can be found in [DeGarmo93], [Grant90], or [Thuesen93] if more information is needed.

SINGLE-PAYMENT COMPOUND-AMOUNT (F/P)

F=Pe^rn

SINGLE-PAYMENT PRESENT-WORTH (P/F)

EQUAL-PAYMENT-SERIES COMPOUND-AMOUNT (F/A)

EQUAL-PAYMENT-SERIES SINKING-FUND (A/F)

EQUAL-PAYMENT-SERIES ...