Summary of Financial Math Formulas
Summary of Financial Math Formulas:
Simple Interest:
1
Compound Interest: If your loan/investment is compounded m times per year:
1
If your loan/investment is compounded continuously:
= Interest Earned = Principal/Present Value = Annual Rate (decimal) = Time (years)
= Future Value/Maturity Value = Principal/Present Value = Annual Rate (decimal) = Number of Compounding Periods per Year = Time (years)
Effective Rate:
1
1
Use this to compute the effective rate if your loan/investment is compounded m times per year.
1
Use this to compute the effective rate if your loan/investment is compounded continuously.
Future Value of Ordinary Annuities & Sinking Funds:
1
1
The payment/deposit is at the END of the period.
= Future Value/Total amount accrued
= Payment/Deposit made in each period
1
1
= rate per period (usually
)
= total number of times compounded (
Annuities Due:
1
1
The payment/deposit is at the BEGINNING of the
period
Present Value of Ordinary Annuities & Amortization:
11
The payment is made at the END of the period.
P = Present Value
= Payment made in each period
11
= rate per period (usually
)
= total number of times compounded (
................
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