Financial Math Fall Final Unit 4 Calculations Review

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What is present value in financial math?

Back

Present value (PV) is the current worth of a future sum of money or stream of cash flows given a specified rate of return.

Front

How do you calculate present value?

Back

PV = FV / (1 + r)^n, where FV is future value, r is the interest rate, and n is the number of periods.

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What is simple interest?

Back

Simple interest is calculated on the principal amount only, not on the interest accrued.

Front

How do you calculate simple interest?

Back

Simple Interest = Principal × Rate × Time.

Front

What is future value in financial math?

Back

Future value (FV) is the amount of money that an investment will grow to over a period of time at a given interest rate.

Front

How do you calculate future value with simple interest?

Back

FV = Principal + (Principal × Rate × Time).

Front

What is compound interest?

Back

Compound interest is calculated on the initial principal and also on the accumulated interest from previous periods.

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How do you calculate compound interest?

Back

Compound Interest = Principal × (1 + r/n)^(nt) - Principal, where n is the number of times interest is compounded per year.

Front

What is the formula for future value with compound interest?

Back

FV = Principal × (1 + r/n)^(nt).

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What is an adjusted bank balance?

Back

An adjusted bank balance is the balance after accounting for outstanding deposits and payments.