FIN 300 Final EXAM crib sheet .docx - Simple Interest...

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Simple Interest Calculations : n: number of interest periods (days) PV: principle (Present Value) I%: annual interest SI: interest amount SFV: principle plus interest -click shift and setup to change days, and periods setting -365 days SI1=n/365*PV*i (i=I%/100) -360 days SI1=n/360*PV*i (i=I%/100) -SI=-SI1 ------------- SFV=-(PV+SI1) Compound Interest Calculations : PV: Present Value FV: Future Value PMT: Payment or deposit n: Number of compounded periods (Installments/payments * year) I%: annual interest rate P/Y: Installment/payment periods per year C/Y: Compounding periods per year -A deposit is indicated by a (+) while a withdrawal is indicated by a (-) - Converting between nominal interest rate and effective interest rate (I%1 = {(1 + I %/100*[C/Y])^[C/Y]/[P/Y] - 1}*100 -The nominal interest rate is converted to an effective interest rate ( I %') when the number of ( P/Y ) is different from the number of C/Y ). This conversion is required for installment savings accounts, loan repayments, etc. - When calculating n , PV , PMT , FV - The following calculation is performed after conversion from the nominal interest rate to the effective interest rate is (i=I%1/100) -When calculating I % - After I % is obtained, the following calculation is performed to convert to I %'. (I%1 = {1 + I%/100)^[P/Y] / [C/Y] – 1} * [C/Y]*100 - Inputting values - A period ( n ) is expressed as a positive value. Either the present value ( PV ) or future value ( FV ) is positive, while the other ( PV or FV ) is negative. PAYMENT = a positive answer and INSTALLMENT = negative answer (PMT answers = + or -) - Savings(I%) = FV>PV, PMT=0, n=# of , PV = (-), FV=(+), I=interest rate -Installment savings(I%) = FV>PMT, PMT and FV have different signs – or +, PV=0, PMT=(-) -Loans(I%) = PMT>PV, PMT and PV have different signs – or +, FV=0, PMT=(-) -Loan when final installment is greater than other installments(I%) = Total of equal amount payments > the difference between the loan amount and final payment method, PV and PMT and FV do not equal zero, PMT = (-), FV = (-) -Future Value(FV) = n=years, I=%, PV=(-), PMT=0, FV=0, P/Y=1 -Principal(PV) = n=years, I=%, PMT=0, FV=(+), P/Y=1, can be negative or positive Net Working Capital (NWC) = Current Assets - Current Liabilities -Compound interest rate(I%) = setup BEGIN, n=years, PV=(-), PMT=0, P/Y=1 -Compound interest period(n) = setup END, I=%, PV=(-), PMT=0, P/Y=1, FV=(+) -Installment savings(FV) = setup END, PV=0,FV=0, PMT=(-), I=% (to calculate for beginning of month setup=BEGIN -Installment amount(PMT) = setup END and NORM1, PV=0, PMT=0, FV=(+) -Number of installments(n) = setup END, n=0, PV=0, PMT=(-), FV=(+) -Interest rate(I%) = setup END, PV=0 or FV=0, I%=0, PMT=(-), FV=(+), C/Y=1 -Principal plus interest with initial deposit(FV) =setup END, I=%, PV=(-), PMT=(-) -Borrowing power(PV) =setup END, PMT=(-), FV=0, I=% -Loan installments(PMT) = PV=(+), FV=0, I=% -Effective interest rate(I%) = setup END, PV=(+), PMT(-), FV=0 Investment Appraisal : Cash flow Net present value ( NPV ) = initial investment + cashflow1/(1+i) + cashflow2/(1+i)^2 + cashflow3/(1+i)^3…… Net future value ( NFV ) = NPV * (1+i)^n Internal rate of return ( IRR ) = (NPV) 0 = initial investment + cashflow1/(1+i) + cashflow2/ (1+i)^2 + cashflow3/(1+i)^3…… Pay back period ( PBP ) = n when NPV>0 when investment can be recovered I% = interest rate, Csh = list of cash flow Investment input steps: first input investment amount as (-) and if there is a resale value add

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