Financial algebra is centered around the idea that money produces more of its kind. Interest rates are one important driver of the increase in the amount of money. But rates also set a price for lending and thus limit the speed of money creation.
Please find an overview of topics covered in the algebra section below.
Time Value of Money
The financial concept of time value of money considers the changes of the value of monetary balances with time.
Derivation of Annuity Formulas
Easy to understand derivation of annuity formulas for the calculation of fixed interest series of constant payments and perpetuities.
Annuity Calculation
Introduction to fixed interest annuity calculation with formulas for present and future value as well as usage examples.
Derivation of Continuous Compounding
Derivation of continuous compounding shows how compound interest converges to an exponential function as compounding intervals tend to zero.
Effective Annual Rate (EAR)
The effective annual rate (EAR) is a conversion of interest rates to an equivalent rate with annual compounding.
Interest Calculation
Introduction to interest calculation formulas that determine how money balances deposited into an interest earning account grow over time.
Installment Loan Calculators
Installment loan calculators for the height of installments, underlying interest rate and end of term balance of installment loans.
Asset Valuation
Financial calculator for asset valuation based on regular income such as dividends for stocks or rents for real property.
Pension Present Value Calculator
Financial calculator that determines the present value of a pension or other types of long-term regular income.
Savings Plan Calculator
Interest rate calculator that determines the growth of a savings plan with regular deposits and interest earnings.
Return on Investment Calculator
Interest rate calculator for the rate of return on an investment (ROI) taking the invested amount and sales proceeds as inputs.
Inflation Calculator
Interest rate calculator determining the loss of real purchasing power of money balances from inflation over variable time spans.
Present Value Calculator
Interest rate calculator for the present value of future income, that is, what future income is worth as of today.
Compound Interest Calculator
Compound interest calculator for the growth of a one-off investment with compound interest of variable compounding frequency.
