Key Financial Math Formulas
Financial mathematics provides tools to analyze monetary transactions and investments. Here’s an overview of essential formulas:
Simple Interest
Simple interest is calculated only on the principal amount. The formula is:
I = P * r * t
Where:
- I = Simple Interest
- P = Principal amount
- r = Interest rate (as a decimal)
- t = Time (in years)
The accumulated amount (A) after time t is:
A = P + I = P(1 + rt)
Compound Interest
Compound interest is calculated on the principal and the accumulated interest. The formula is:
A = P(1 + r/n)^(nt)
Where:
- A = Accumulated amount
- P = Principal amount
- r = Interest rate (as a decimal)
- n = Number of times interest is compounded per year
- t = Time (in years)
For continuous compounding, the formula is:
A = Pe^(rt)
Where:
- e ≈ 2.71828 (Euler’s number)
Present Value
Present value (PV) is the current worth of a future sum of money or stream of cash flows, given a specified rate of return. For a single future amount:
PV = A / (1 + r/n)^(nt)
Or, for continuous compounding:
PV = Ae^(-rt)
Annuities
An annuity is a series of equal payments made at regular intervals.
Future Value of an Ordinary Annuity
An ordinary annuity has payments made at the end of each period.
FV = PMT * (((1 + r/n)^(nt) – 1) / (r/n))
Where:
- FV = Future Value
- PMT = Payment amount per period
Present Value of an Ordinary Annuity
PV = PMT * ((1 – (1 + r/n)^(-nt)) / (r/n))
Future Value of an Annuity Due
An annuity due has payments made at the beginning of each period.
FV = PMT * (((1 + r/n)^(nt) – 1) / (r/n)) * (1 + r/n)
Present Value of an Annuity Due
PV = PMT * ((1 – (1 + r/n)^(-nt)) / (r/n)) * (1 + r/n)
Loans and Mortgages
The formula to calculate the periodic payment (PMT) on a loan is:
PMT = P * ((r/n) / (1 – (1 + r/n)^(-nt)))
Net Present Value (NPV)
NPV is the difference between the present value of cash inflows and the present value of cash outflows over a period of time.
NPV = Σ [CFt / (1 + r)^t] – Initial Investment
Where:
- CFt = Cash flow during period t
- r = Discount rate
Internal Rate of Return (IRR)
IRR is the discount rate that makes the NPV of all cash flows from a particular project equal to zero. It often requires iterative methods or spreadsheet software to calculate.
These formulas provide a strong foundation for understanding and performing financial calculations. Remember to choose the correct formula based on the specific situation and ensure you understand the variables involved.
849×1200 formulas de matematica enem formulas matematica matematica from br.pinterest.com 
0 x 0 matematica financeira como ferramenta nas financas pessoais youtube from www.youtube.com 
1080×1920 financial markets financial tips accounting basics finance degree from www.pinterest.pt 
837×839 ingenieria economica utp formulas matematicas financieras from ingekmc.blogspot.com 
788×1202 formulas de matematica financeira engenharia economica from www.passeidireto.com 
1280×720 matematica financeira youtube from www.youtube.com 
735×1102 formulas juros matematica financeira from www.passeidireto.com 
1280×720 pagina principal campusvirtualfacitec from campusvirtual.facitec.edu.py 
900×338 matematica financeira conceitos basicos como estudar from conteudo.saraivaeducacao.com.br 
851×1173 formulas matematica financeira matematica financeira from www.passeidireto.com 
1080×1080 matematica financeira page from calculadorajuroscompostos.com.br 
736×864 resolucao matematica financeira formulas matematica ensino de from br.pinterest.com 
450×683 matematica financeira excel suas aplicacoes from www.polytechnica.com.br 
1191×1684 matematica financeira matematica financeira from www.passeidireto.com 
502×1024 juros compostos acumulados matematica financeira math formulas from www.pinterest.com.mx 
843×930 formulas de matematica from mavink.com 
638×903 formulas de matematica financeira from pt.slideshare.net 
735×1102 formulas de juros truques de matematica ensino de matematica aulas from www.pinterest.com 
0 x 0 formulas financeiras excel formulas mais importantes youtube from www.youtube.com 
1080×1920 como calcular capital partir dos juros pagos matematica from br.pinterest.com 
