Compounding Example Assume that the interest rate is 10%percent annually. What this means is that if you invest $1 for one year? DS1*(1+10%)or$1.10in1year Investing $1 for yet another year 1.10*(1+10%)orS1.21in2-years THE COURSE OF FINANCE 2017 SPRING STTU 9Compounding Example  Assume that the interest rate is 10% percent annually.  What this means is that if you invest $1 for one year?  $1*(1+10%) or $1.10 in 1 year  Investing $1 for yet another year  1.10 *(1+10%) or $1.21 in 2-years THE COURSE OF FINANCE 2017 SPRING SJTU 9