Finance Formulas / July 14, 2018 / Rory Wise
An accounting ratio compares two line items in a company’s financial statements, namely made up of its income statement, balance sheet and cash flow statement. These ratios can be used to evaluate a company’s fundamentals and provide information about the performance of the company over the last quarter or fiscal year.
An immediate payment annuity is an annuity contract that is purchased with a single payment and pays a guaranteed income that starts almost immediately. Also called a "single-premium immediate annuity (SPIA)," "income annuity" or simply an "immediate annuity," an immediate payment annuity generally starts payment one month after a premium is paid and continues for as long as the annuitant (buyer) is alive or for a specific period of time.
Compound interest is calculated by multiplying the principal amount by one plus the annual interest rate raised to the number of compound periods minus one.The total initial amount of the loan is then subtracted from the resulting value.
If you have credit cards or bank loans for your home, you pay interest (or a finance charge) on that money at a specific percentage over the course of the year. This is called APR, or annual percentage rate. Calculating your APR on your credit cards takes only a few minutes if you know some key factors and a little algebra. The APR on mortgage loans, however, is different from the simple interest rate because of additional charges or fees to you for securing your loan.
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