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Financial Formulas (with Calculators)

*The content of this site is not intended to be financial advice. This site was designed for educational purposes. The user should use information provided by any tools or material at his or her own discretion, as no warranty is provided.

https://www.financeformulas.net/


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Simple Interest - Formula (with Calculator)

Using the prior example of a $1000 account with a 10% rate, after 3 years the balance would be $1300. This can be determined by multiplying the $1000 original balance times [1+(10%)(3)], or times 1.30.

https://www.financeformulas.net/Simple_Interest.html


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Annuity Due Payment (FV) Formula (with Calculator)

The annuity due payment formula using future value is used to calculate each equal cash flow or payment of a series of cash flows when the future value is known.

https://www.financeformulas.net/Annuity-Due-Payment-from-Future-Value.html


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Present Value Factor - Formula (with Calculator)

The formula for the present value factor is used to calculate the present value per dollar that is received in the future. The present value factor formula is based on the concept of time value of money.

https://www.financeformulas.net/Present_Value_Factor.html


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Annual Percentage Yield Formula (with Calculator)

Example of Annual Percentage Yield. An account states that its rate is 6% compounded monthly. The rate, or r, would be .06, and the number of times compounded would be 12 as there are 12 months in a year.When we put this into the formula we have

https://www.financeformulas.net/Annual_Percentage_Yield.html


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Annuity Payment (FV) Formula (with Calculator)

The annuity payment formula shown above is used to calculate the cash flows of an annuity when future value is known. An annuity is denoted as a series of periodic payments.

https://www.financeformulas.net/Annuity-Payment-from-Future-Value.html


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Annuity Payment (PV) Formula (with Calculator)

The annuity payment formula is used to calculate the periodic payment on an annuity. An annuity is a series of periodic payments that are received at a future date.

https://www.financeformulas.net/Annuity_Payment_Formula.html


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Continuous Compounding Formula (with Calculator)

This can be shown as $1000 times e (.2) which will return a balance of $1221.40 after the two years. For comparison, an account that is compounded monthly will return a balance of $1220.39 after the two years.

https://www.financeformulas.net/Continuous_Compounding.html


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Preferred Stock (PV) - Formula (with Calculator)

*The content of this site is not intended to be financial advice. This site was designed for educational purposes. The user should use information provided by any tools or material at his or her own discretion, as no warranty is provided.

https://www.financeformulas.net/Preferred_Stock.html


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Doubling Time - Continuous Compounding - Formula (with ...

The doubling time formula with continuous compounding is the natural log of 2 divided by the rate of return. The formula for doubling time with continuous compounding is used to calculate the length of time it takes doubles one's money in an account or investment that has continuous compounding.

https://www.financeformulas.net/Doubling-Time-Continuous-Compounding.html


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Future Value of Annuity Formula (with Calculator)

When the payments are all the same, this can be considered a geometric series with 1+r as the common ratio.. Using the geometric series formula, the future value of an annuity formula becomes

https://www.financeformulas.net/Future_Value_of_Annuity.html


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Average Collection Period Formula (with Calculator)

The average collection period formula is the number of days in a period divided by the receivables turnover ratio. The numerator of the average collection period formula shown at the top of the page is 365 days.

https://www.financeformulas.net/Average-Collection-Period.html


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Present Value of a Growing Annuity - Formula (with Calculator)

This formula is the general formula for summing the discounted future cash flows along with using 1 + g to factor in that each future cash flow will increase at a specific rate.. This present value of a growing annuity formula can then be rewritten as

https://www.financeformulas.net/Present_Value_of_Growing_Annuity.html


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Loan Payment Formula (with Calculator)

The loan payment formula is used to calculate the payments on a loan. The formula used to calculate loan payments is exactly the same as the formula used to calculate payments on an ordinary annuity.

https://www.financeformulas.net/Loan_Payment_Formula.html


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Present Value of Annuity - Formula (with Calculator)

The present value of annuity formula determines the value of a series of future periodic payments at a given time. The present value of annuity formula relies on the concept of time value of money, in that one dollar present day is worth more than that same dollar at a future date.

https://www.financeformulas.net/Present_Value_of_Annuity.html


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Present Value Formula (with Calculator)

Example of Present Value Formula. An individual wishes to determine how much money she would need to put into her money market account to have $100 one year today if she is earning 5% interest on her account, simple interest.

https://www.financeformulas.net/Present_Value.html


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Doubling Time - Simple Interest - Formula (with Calculator)

The doubling time for simple interest is simply 1 divided by the periodic rate. The formula for doubling time with simple interest is used to calculate how long it would take to double the balance on an interesting bearing account that has simple interest.

https://www.financeformulas.net/Doubling-Time-Simple-Interest.html


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Future Value Factor - Formula (with Calculator)

The formula for the future value factor is used to calculate the future value of an amount per dollar of its present value. The future value factor is generally found on a table which is used to simplify calculations for amounts greater than one dollar (see example below).

https://www.financeformulas.net/Future-Value-Factor.html


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Present Value Annuity Factor - Formula (with Calculator)

The payment variable can be taken out of the formula to determine the factor. By having a table that consists of the various factors associated with given rates and periods, calculating the present value of annuity can be simplified.

https://www.financeformulas.net/Present-Value-Annuity-Factor.html


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Annuity Due Payment - PV Formula (with Calculator)

The annuity due payment formula using present value is used to calculate each installment of a series of cash flows or payments when the first installment is received immediately.

https://www.financeformulas.net/Annuity-Due-Payment-from-Present-Value.html


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Zero Coupon Bond Value - Formula (with Calculator)

Example of Zero Coupon Bond Formula. A 5 year zero coupon bond is issued with a face value of $100 and a rate of 6%. Looking at the formula, $100 would be F, 6% would be r, and t would be 5 years.

https://www.financeformulas.net/Zero_Coupon_Bond_Value.html


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Risk Premium - Formula (with Calculator)

The formula for risk premium, sometimes referred to as default risk premium, is the return on an investment minus the return that would be earned on a risk free investment.

https://www.financeformulas.net/Risk-Premium.html


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Geometric Mean Return Formula (with Calculator)

Example of the Geometric Mean Return Formula. A simple example of the geometric mean return formula would be $1000 in a money market account that earns 20% in year one, 6% in year two, and 1% in year three.

https://www.financeformulas.net/Geometric_Mean_Return.html


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Compound Interest Formula (with Calculator)

Example of Compound Interest Formula. Suppose an account with an original balance of $1000 is earning 12% per year and is compounded monthly. Due to being compounded monthly, the number of periods for one year would be 12 and the rate would be 1% (per month).

https://www.financeformulas.net/Compound_Interest.html


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Future Value Formula (with Calculator)

Future Value (FV) is a formula used in finance to calculate the value of a cash flow at a later date than originally received. This idea that an amount today is worth a different amount than at a future time is based on the time value of money.

https://financeformulas.net/Future_Value.html


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Future Value of Growing Annuity - Formula (with Calculator)

The formula for the future value of a growing annuity is used to calculate the future amount of a series of cash flows, or payments, that grow at a proportionate rate.

https://www.financeformulas.net/Future-Value-of-Growing-Annuity.html


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Banking Formulas (with Calculators)

*The content of this site is not intended to be financial advice. This site was designed for educational purposes. The user should use information provided by any tools or material at his or her own discretion, as no warranty is provided.

https://www.financeformulas.net/Banking-Formulas.html


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Stock/Bond Formulas (with Calculators)

*The content of this site is not intended to be financial advice. This site was designed for educational purposes. The user should use information provided by any tools or material at his or her own discretion, as no warranty is provided.

https://www.financeformulas.net/Stock-and-Bond-Formulas.html


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Present Value of Stock with Constant Growth - Formula ...

The formula for the present value of a stock with constant growth is the estimated dividends to be paid divided by the difference between the required rate of return and the growth rate.

https://www.financeformulas.net/Present-Value-of-Stock-with-Constant-Growth.html


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Perpetuity Yield Formula (with Calculator)

The formula that is used to calculate the yield on a perpetuity is the payment divided by the present value of the perpetuity. A perpetuity is a form of annuity that has an infinite amount of periodic payments.

https://financeformulas.net/Perpetuity-Yield.html


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PV of Perpetuity - Formula (with Calculator)

After solving, the amount expected to pay for this perpetuity would be $200. Alternative Formula. The perpetuity value formula is a simplified version of the present value formula of the future cash flows received per period.

https://www.financeformulas.net/Perpetuity.html


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Equivalent Annual Annuity - Formula (with Calculator)

The equivalent annual annuity formula is used in capital budgeting to show the net present value of an investment as a series of equal cash flows for the length of the investment.

https://www.financeformulas.net/Equivalent_Annual_Annuity.html


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Dividend Yield - Formula (with Calculator)

The formula for the dividend yield is used to calculate the percentage return on a stock based solely on dividends. The total return on a stock is the combination of dividends and appreciation of a stock.

https://www.financeformulas.net/Dividend_Yield.html


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Solve for Number of Periods (PV&FV) - Formula (with ...

*The content of this site is not intended to be financial advice. This site was designed for educational purposes. The user should use information provided by any tools or material at his or her own discretion, as no warranty is provided.

https://www.financeformulas.net/Solve-for-Number-of-Periods-PV-and-FV.html


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Days in Inventory - Formula (with Calculator)

The formula to calculate days in inventory is the number of days in the period divided by the inventory turnover ratio. This formula is used to determine how quickly a company is converting their inventory into sales.

https://www.financeformulas.net/Days-in-Inventory.html


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Debt Coverage Ratio - Formula (with Calculator)

The formula for debt coverage ratio is net operating income divided by debt service. The debt coverage ratio is used in banking to determine a companies ability to generate enough income in its operations to cover the expense of a debt.

https://www.financeformulas.net/Debt-Coverage-Ratio.html


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Balloon Balance of a Loan - Formula (with Calculator)

The balloon loan balance formula is used to calculate the amount due at the end of a balloon loan. A balloon loan, sometimes referred to as a balloon note, is a note that has a term that is shorter than its amortization.

https://www.financeformulas.net/Loan_Balloon_Balance.html


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Present Value of Growing Perpetuity - Formula (with ...

The present value of a growing perpetuity formula is the cash flow after the first period divided by the difference between the discount rate and the growth rate.

https://www.financeformulas.net/Present_Value_of_Growing_Perpetuity.html


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Annuity Payment Factor (PV) Formula (with Calculator)

The annuity payment factor is used to simplify calculations for an annuity payment. The formula shown is specifically for simplifying annuity payment calculations when the present value of the annuity is known(in contrast to the future value being known).

https://www.financeformulas.net/Annuity-Payment-Factor.html


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Book Value per Share - Formula (with Calculator)

Use of Book Value per Share. The book value per share may be used by some investors to determine the equity in a company relative to the market value of the company, which is the price of its stock.

https://www.financeformulas.net/Book-Value-per-Share.html