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imported>Doug Williamson |
imported>Doug Williamson |
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| (CF).
| | Standard Setting Body. |
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| A number greater than one which we multiply a present value by, to work out its [[Future Value]] (FV) as:
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| FV = CF x present value.
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| The periodic Compounding Factor is calculated from the periodic yield as:
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| CF = ( 1 + periodic yield )<sup>n</sup>
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| Where:
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| n = number of periods
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| '''Example'''
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| Annual effective yield (r) = 6%.
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| Number of years in the total period (n) = 2.
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| Then:
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| Compounding Factor = ( 1 + r )<sup>n</sup>
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| = 1.06<sup>2</sup>
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| = 1.1236.
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| == See also == | | == See also == |
| * [[Compounding effect]] | | * [[Standard Setting Body]] |
| * [[Discount factor]]
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| * [[Future value]]
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| * [[Present value]]
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Revision as of 11:48, 30 May 2013
Standard Setting Body.
See also
