1 Business Math Chapter 13: Compound Interest, Future Value and Present Value. - ppt download

1 Business Math Chapter 13: Compound Interest, Future Value and Present Value. - ppt download: Cleaves/Hobbs: Business Math, 7e Copyright 2005 by Pearson Education, Inc. Upper Saddle River, NJ All Rights Reserved 3 Simple and Compound Interest In some loans, interest is computed once during the life of the loan, using the simple interest formula. In other loans, interest is computed more than once during the life of the loan or investment. The interest is added to the principal and that amount becomes the principal for the next calculation of interest. This process is called compounding interest.