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Financial Formulas, Financial Equations and Economic Equations

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Financial Math Formulas and Financial Equations Links

Financial math has as its foundation many basic finance formulas related to the time value of money. ● MoneyToys.com

In addition, particulars related to certain financial instruments (bonds for example) are calculated using ● CreditCardBubble.com

derivatives of these basic formulas. Other formulas used in financial math are related to probability,
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randomness and statistical analysis.

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The financial equations below are helpful as they are. However, using the financial formulas provided
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here, one may also generalize and calculate answers for even more complex financial problems.
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Symbols and Variables in Financial Formulas

One important key to understanding

formulas for financial math is

knowledge of what financial symbols

and variables represent.

The chart of symbols (located at the

right) offers an explanation of the

financial variables used in the

formulas provided below.

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Financial Formulas, Financial Equations and Economic Equations

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Convert Interest Rate Compounding Bases: Financial Wisdom

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Calculate Effective Interest Rate:

Future Value Formulas

The future value of an single sum of money, a series of cash flows or of an annuity is the amount of

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Financial Formulas, Financial Equations and Economic Equations

value the invested money will have at a point in the future. The different equations below are used to

calculate the future value of different types of monies and investments.

Calculate the Future Value of a Single Sum:

Calculate the Future Value with Compounding

Calculate the Future Value of a Cash Flow Series

Calculate the Future Value of an Annuity

Calculate the Future Value of an Annuity Due

Calculate the Future Value of an Annuity with Compounding

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Financial Formulas, Financial Equations and Economic Equations

Payment Calculations

The most commonly sought payment calculation is the one for monthly payments. Of course, there are

other ways payments are calculated as you can see below.

Calculate Monthly Payment

Calculate Sinking Fund:

Present Value Formulas

Present value calculations are performed to determine the value of an investment made in the future.

The future investment may be of a single sum or a series of cash flows.

Calculate the Present Value of a Single Sum

Calculate the Present Value with Compounding

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Financial Formulas, Financial Equations and Economic Equations

Calculate the Present Value of a Cash Flow Series

Calculate the Present Value of an Annuity with Continuous Compounding

Calculate the Present Value of a Growing Annuity with Continuous Compounding

Calculate the Net Present Value of a Cash Flow Series

Expanded Net Present Value Formula

Cash Flow Series Calculations

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Financial Formulas, Financial Equations and Economic Equations

Calculate the Present Worth Cost of a Cash Flow Series

Calculate the Present Worth Revenue of a Cash Flow Series

Software for Creating Financial Formulas

The formulas displayed on this page were all created using MathCast, the open

source equation editor, by Tom Chekam

Copyright © 2007-2010 Wheatworks Software, LLC All Rights Reserved Worldwide | Design by: styleshout | About Us | Privacy Policy

Wheatworks™, CustomCalcs™, the "+9$7" logo, and MoneyToys™ are trademarks of Wheatworks Software, LLC.

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