In finance, based on the provided reference, n commonly stands for Number of compoundings.
Here's a breakdown using common financial formulas:
| Variable | Meaning |
|---|---|
| N | Number of compoundings |
| I% | Annual interest rate |
| PV | Present Value |
| PMT | Payment |
| FV | Future Value |
Therefore, when calculating the future value of an investment or loan, 'n' represents the total number of times the interest is compounded over the life of the investment or loan. For instance:
- If you have an investment that compounds monthly for 5 years, n = 5 years * 12 months/year = 60.
- If you have an investment that compounds quarterly for 10 years, n = 10 years * 4 quarters/year = 40.
