Future Value and Compounding (Future Value in a Multi-Period Setting)

This video shows how one can think about Future Value (FV) of a single cash flow in a multi-period setting. It also explains the significance of compound interest and how it differs from simple interest.
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My name is Atif Ikram. I am a Clinical Professor of Finance at Arizona State University, where I teach courses in Corporate Finance, Personal Finance, Real Estate Finance and Investments (wpcarey.asu.ed....
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[@angadrane5276]

may i know did you get 1.05?

[@professorikram]

Sure. 500 is the common factor. So writing 500 + (0.05 x 500) is the same as 500 x (1 +0.05) because 500 x 1 = 500 and 500 x 0.05 = 0.05 x 500.
And when you solve 1+0.05 you get 1.05.

[@socialmurdock4816]

@@professorikram My brain still can't comprehend how you got the 1.05 🥲