(1+i/m)m - 1 Interest Payment = Principal x Rate x

TimeTime = actual no of days /360 days

Formula Toolbox:

i

iAFV

n 1)1(

n

n

ii

iAPV

)1(

1)1(

Formula Toolbox:Future Value (FV) = PV*(1+i)n

Present Value (PV) = FV*(1+i)-n

Time Value of Money Formulas

For single cash flow computations

• Simple Interest: I = PRT• FV = PV*(1+i)n

• PV = FV*(1+i)-n

• n = ln(FV/PV) ln (1+i)• i = (FV/PV)1/n -1

For single CF and for annuities:

Effective interest rate (for different compounding periods) = (1+ 1/m)m - 1

For annuities

i

iAFV

n 1)1(

n

n

ii

iAPV

)1(

1)1(