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Note that for all the following equations, the interest rate is expressed as a fraction, eg 7% is 0.07. For the rate per month, divide this by 12.|
Home Loan Repayments
Repayment amount for a set principal over a set number of payments
a = ( p * r * ( 1 + r )n ) / ( ( 1 + r)n - 1 )
Number of payments for a set principal and set repayment amount
n = ln ( a / (a - p * r ) ) / ln (1 + r)
Future Value of an Investment
Future value of a an amount invested for a fixed rate and time
f = p * ( 1 + r )n
Future value where a set amount is added each month or year
f = a * ( ( 1 + r )n - 1 ) / r
If you start with an initial pricipal, then add an amount each month, calculate the future value of the principal and the future value of the added amounts and add the two totals.
Where you know the initial and final amount and want the annualised return
r = ( f / p ) ^ ( 1 / n ) - 1
You can order the book in printed or e-book format through the Allen & Unwin website. Click here.
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financial decisions. The information and calculations
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