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    Formulas in Business Math

    Uploaded by

    Geraldo Mejillano
    This document provides formulas for various calculations involving interest and discounts, including: 1) Simple interest and simple discount formulas involving principal (P), interest rate (r), time (t), amount (F), and discount (D). 2) Compound interest formulas involving principal (P), interest rate (i), number of compounding periods (m), time (t), and amount (F). 3) Formulas for calculating time, nominal interest rate, effective rate, nominal rate, and continuous compounding involving the same variables.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd

    Formulas in Business Math

    Uploaded by

    Geraldo Mejillano
    2K views1 page
    This document provides formulas for various calculations involving interest and discounts, including: 1) Simple interest and simple discount formulas involving principal (P), interest rate (r), time (t), amount (F), and discount (D). 2) Compound interest formulas involving principal (P), interest rate (i), number of compounding periods (m), time (t), and amount (F). 3) Formulas for calculating time, nominal interest rate, effective rate, nominal rate, and continuous compounding involving the same variables.

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    This document provides formulas for various calculations involving interest and discounts, including: 1) Simple interest and simple discount formulas involving principal (P), interest rate (r), time (t), amount (F), and discount (D). 2) Compound interest formulas involving principal (P), interest rate (i), number of compounding periods (m), time (t), and amount (F). 3) Formulas for calculating time, nominal interest rate, effective rate, nominal rate, and continuous compounding involving the same variables.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    2K views1 page

    Formulas in Business Math

    Uploaded by

    Geraldo Mejillano
    This document provides formulas for various calculations involving interest and discounts, including: 1) Simple interest and simple discount formulas involving principal (P), interest rate (r), time (t), amount (F), and discount (D). 2) Compound interest formulas involving principal (P), interest rate (i), number of compounding periods (m), time (t), and amount (F). 3) Formulas for calculating time, nominal interest rate, effective rate, nominal rate, and continuous compounding involving the same variables.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
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    DE LA SALLE LIPA ________________________________________________________________________

    Formulas in Business Math

    Simple Interest: Simple Discount:


    I = Prt D = Fdt
    𝐼 =𝐹−𝑃 𝐷 =𝐹−𝑃
    F=P+I P=F–D
    F = P(1 + rt) P = F(1 – dt)
    𝐼 𝐷
    𝑡= 𝑑=
    𝑃𝑟 𝐹𝑡
    𝐹−𝑃 𝐹−𝑃
    𝑡= 𝑑=
    𝑃𝑟 𝐹𝑡
    𝐼 𝐷
    𝑟= 𝑡=
    𝑃𝑡 𝐹𝑑
    𝐹−𝑃 𝐹−𝑃
    𝑟= 𝑡=
    𝑃𝑡 𝐹𝑑
    𝐼 𝐷
    𝑃= 𝐹=
    𝑟𝑡 𝑑𝑡
    𝐹 𝐹−𝑃
    𝑃= 𝐹=
    (1+𝑟𝑡) 𝑑𝑡
    𝑃
    𝑃 =𝐹−𝐼 𝐹=
    (1 – 𝑑𝑡)
    𝑑
    𝑟=
    1 – 𝑑𝑡
    𝑟
    𝑑=
    1 + 𝑟𝑡

    Compound Interest: Compound Amount at a Fraction of a Period:


    𝑟
    𝑖= Step 1: F1 = P(1 + i)n
    𝑚
    Step 2: F = F1(1 + rt)
    n = t(m)
    F = P(1+i)n Present Value at a Fraction of a Period:
    𝐹
    𝑃= or P = F(1 + i) –n Step 1: P1 = F(1 + i) –n
    (1+𝑖)𝑛
    Step 2: P = P1(1 + rt)

    Time in Compound Interest: Nominal Rate of Compound Interest:


    𝐹 1
    𝑙𝑜𝑔(𝑃) 𝐹 𝑛
    𝑛= 𝑖= (𝑃) −1
    log(1+𝑖)
    𝑟
    and since n = tm, and since 𝑖 = ,
    𝑚
    𝑛
    therefore, 𝑡 = therefore, r = i(m)
    𝑚

    Effective Rate: Nominal Rate:


    𝑟 𝑚 1
    𝑢 = (1 + ) − 1 𝑟 = 𝑚 [(1 + 𝑢)𝑚 − 1]
    𝑚

    Continuous Compounding:
    𝐹 = 𝑃𝑒 𝑗𝑡
    𝑃 = 𝐹𝑒 −𝑗𝑡

    Page 1 of 1

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