The total amount at the end of the year, 1 = principal + interest: year 1 of the year 1.FV1 = PV+ iPVThe total amount at the end of the year, 2 = second-year principal + interest amount starting year 2.FV2= (PV+ iPV) +i (PV+ iPV)= PV+ iPV+iPV+ i2PV=PV (1+i+i+i2)=PV (1+2i+i2)=PV (1+i) 2
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