P

move one time unit forward P ' =P ( 1+i ) move one timeunit backward P' =
1+i

Simple Interest I =P i F n=P+ I n I n =P i n F n=P ( 1+ )

TABLE 2.6
Summary of Discrete Compounding Interest Factors.
To Find Given Factor Symbol Name
n
P F ( 1+i ) (PF i , n) Single sum, present worth factor

F P ( 1+i )n (FPi , n) Single sum, compound amount factor

( 1+i )n1
P A ( P A i , n) Uniform series, present worth factor
i ( 1+i )n

i ( 1+i )n
A P ( AP i , n) Uniform series, capital recovery factor
( 1+i )n1
( 1+i )n1
F A ( FA i ,n) Uniform series, compound amount factor
i
i
A F ( AF i ,n) Uniform series, sinking fund factor
( 1+i )n1
1( 1+ ) (1+i )n
P G (PG i , n) Gradient series, present worth factor
i2
( 1+i )n( 1+ )
F G (FGi , n) Gradient series, future worth factor
i2
( 1+i )n(1+) Gradient to uniform series conversion
A G ( AG i , n)
i[( 1+i )n1] factor
1( 1+ j )n ( 1+i )n
P A1,j for i j (P A 1 i , j , n) Geometric series, present worth factor
i j
n
P A1,j for i= j - Geometric series, present worth factor
(1+i)
 ( 1+i )n( 1+ j )n
F A1,j for i j ( FA 1 i , j ,n) Geometric series, future worth factor
i j
n1
F A1,j n ( 1+ i ) for i= j - Geometric series, future worth factor

Nominal annualinterest rate (r ) r

Period Interest rate ( i )= i=
Number of interest periods per year(m) m

r m
( )
i eff = 1+
m
m
1( 1+i ) 1