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