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Appendix A: Tables and Reference Information 159
Financial Formulas
This section contains financial formulas for computing time value of
money, amortization, cash flow, interest-rate conversions, and days
between dates.
Time Value of Money
where: PMT = 0
The iteration used to compute i:
where:
PMT
y
x
C/Y
P/Y
I%
ƒ
=
=
=
=
=
0
C/Y ÷ P/Y
(.01 × I%) ÷ C/Y
compounding periods per year
payment periods per year
interest rate per year
where:
x
=
i
y
= P/Y ÷ C/Y
where:
k
= 0 for end-of-period payments
k
= 1 for beginning-of-period payments
ie
yx1+()ln×()
[]1–=
i
–
FV PV÷()
1 N÷()
1–=
0 PV PMT G
i
11i+()
N–
–
i
------------------------------
FV 1 i+()
N–
×+×+=
I%100CY e
yx1+()ln×()
1–[]×⁄×=
G
i
1 ik×+=
N
PMT G
i
FV i×–×
PMT G
i
PV i×+×
----------------------------------------------
ln
1 i+()ln
----------------------------------------------------------=