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Financial Mathematics Formulas
Browse 0 reviewed financial mathematics formulas with concrete inputs, outputs, calculations, applicability checks, and LaTeX.
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Financial Mathematics
Compound Annual Growth Rate
CAGR=\left(\frac{V_f}{V_i}\right)^{1/n}-1Finds the constant annual growth rate connecting an initial and final value.
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Continuous Compounding
A=Pe^{rt}Computes accumulated value under continuous compounding.
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Coupon Bond Price
P=\sum_{t=1}^{n}\frac{C}{(1+y)^t}+\frac{F}{(1+y)^n}Discounts coupon payments and face value using yield per period.
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Effective Annual Rate
EAR=\left(1+\frac{r}{m}\right)^m-1Converts a nominal annual rate compounded m times into an effective annual rate.
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Future Value of Ordinary Annuity
FV=PMT\frac{(1+r)^n-1}{r}Computes the future value of equal end-of-period payments.
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Internal Rate of Return Equation
0=\sum_{t=0}^{n}\frac{CF_t}{(1+IRR)^t}Defines an internal rate of return as a discount rate that makes NPV zero.
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Level Loan Payment
PMT=P\frac{r(1+r)^n}{(1+r)^n-1}Calculates the fixed payment for a fully amortizing loan.
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Net Present Value
NPV=\sum_{t=0}^{n}\frac{CF_t}{(1+r)^t}Sums discounted cash flows including the initial investment.
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Present Value
PV=\frac{FV}{(1+r)^n}Discounts a future amount back n compound periods.
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Present Value of Ordinary Annuity
PV=PMT\frac{1-(1+r)^{-n}}{r}Discounts equal end-of-period payments to a present value.
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Simple Interest
A=P(1+rt)Computes accumulated value when interest is applied only to the original principal.
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