The Interest Rate
Simple Interest
Compound Interest
Amortizing a Loan
Compounding More Than Once per Year
Types of Interest
Simple Interest
Interest paid (earned) on only the original amount, or principal, borrowed (lent).
Compound Interest
Interest paid (earned) on any previous interest earned, as well as on the principal borrowed (lent).
Simple Interest Formula
I=PRT
Where As:
I=Interest
P=Principle
R=Rate of Interest
T=Time Period
P=Principle
R=Rate of Interest
T=Time Period
Future Value:
It is the value at some future time of a present amount of money, or a series of payments, evaluated at a given interest rate.
The “Rule-of-72”
What is Annuity?
An Annuity represents a series of equal payments (or receipts) occurring over a specified number of equidistant periods
Types of Annuities
Ordinary Annuity:
Payments or receipts occur at the end of each period.
Annuity Due:
Payments or receipts occur at the beginning of each period
Note: ALL TYPES AND FORMULAS WITH PROBLEMS ARE GIVEN IN THE PDF FILE GIVEN BELOW, KINDLY DOWNLOAD IT.
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