Calculation formula. Used notations. Project Breakdown.
[1] Calculation method used: 30 / 360
Number of days in a month = 30
Number of days in a year = 360
[2] Future Investment Value, FV
Calculation formula:
FV =
P × (1 + r/n)n×t
FV, Future Investment Value
P, Principal (initial amount), P = 646.00
r, Annual compound interest rate, r = 3.00%
n, Number of times the interest compounds during a year
Compound frequency: daily (360 times a year)
n = 360
r/n = 3.00%/360 = (3.00 ÷ 100)/360 = 3.00/(100 × 360)
r/n = 0.000083333333
t, Duration of the investment
n×t, Duration of the investment, related to n
n×t =
+ 1 month × 30 days / month
n×t = 30 days
Calculate FV
Substitute for the values in the FV formula:
FV =
P × (1 + r/n)n×t =
646.00 × (1 + 0.000083333333)30 =
646.00 × 1.00008333333330 =
646.00 × 1.002503023174 ≈
647.62
[3] Compound interest amount, CI
Calculation formula
CI = FV - P
CI, compound interest amount
FV, Future Investment Value
P, Principal (initial amount)
CI ≈
647.62 - 646.00 ≈
1.62
[4] Project Breakdown. Monthly.
Interest compounded: daily (360 times a year).
Month | Days | Interest | Total interest | Balance |
---|
0 | 0 | -- | -- | 646.00 |
1 | 30 | 1.62 | 1.62 | 647.62 |
Month | Days | Interest | Total interest | Balance |
Answer: