### Compounded Interest (Future Value)

Compound interest is when interest is immediately re-invested.

This is an example of a __Geometric Sequence__ where a series of numbers are multipled by a fixed amount.

**Annual Compounding**

If you invested £50 today how much would you have **after 3 years** if the interest rate is 6% with annual compounding?

If you invested £50 today how much would you have **after 185 days</b> if the interest rate is 6% with annual compounding?**

**Semi-Annual Compounding**

**Semi-Annual Compounding**

**If you invested £50 today how much would you have after 3 years if the interest rate is 6% with semi-annual compounding?Semi-annual compounding means that the interest is calculated and re-invested every 6 months.**

**Quarterly Compounding**

**Quarterly Compounding**

**If you invested £50 today how much would you have after 3 years if the interest rate is 6% with quarterly compounding?**

**Monthly Compounding**

**Monthly Compounding**

**If you invested £50 today how much would you have after 3 years if the interest rate is 6% with monthly compounding?**

**Daily Compounding**

**Daily Compounding**

**If you invested £50 today how much would you have after 3 years if the interest rate is 6% with daily compounding?**

**Important**

**Important**

**The higher the interest rate the larger the future valueThe shorter the compounding period, the larger the future value.It is common to compute the future value of $1, then multiply it by the original amount.**

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