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$1,100 next year is the same as $1,000 now. And $1,210 in 2 years is the same as $1,000 now. etc; In fact all those amounts are the same (considering when they occur and the 10% interest). Easier Calculation. But instead of "adding 10%" to each year it is easier to multiply by 1.10 (explained at Compound Interest): So we get this (same result ...

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