00:01
Right, we are going to be looking here at the basic compounding formula.
00:10
So we have to define the formula.
00:14
Future value, which is the fv, should be equal to the principle p1 plus the interest rate to the power of the number of periods, which is n.
00:29
Okay, so basically we are given a $1 ,000 investment at 8 % in 10 years time.
00:38
What is the future value going to be? so we're simply going to substitute in our formula $1 ,000 and 1 plus the interest rate is 8%, which in decimal or divided by 100 is 0 .08.
00:56
All right, always to remember this.
00:59
That the 8 % is supposed to be given as 8 over 100, which is the 0 .08.
01:10
And the number of periods that are given is 10 because we are looking at 10 years that we have to look at...