A generic tag to understand the calculations in a specific case. Please give out a sample illustration and ask a specific question. Ideally should also be accompanied by specific subject tags like "credit-cards", "savings-account", "index-funds" etc.
8
votes
2answers
69 views
Is there a term that better describes a compound annual growth rate (CAGR) when it is negative?
When calculating rates of return for an investment or portfolio over time, whether to report or compare performance, one frequently calculates the Compound Annual Growth Rate (CAGR).
I've got a ...
4
votes
2answers
221 views
Discussing real estate appreciation: Compound vs. simple interest?
When people say real estate has appreciated 8 % over the past 5 years, do they mean 8 % compounded annually? or simple interest annually?
5
votes
1answer
43 views
Comparing pre-tax versus post-tax health expenses?
I understand the concepts from this question and everything I have read says that the benefit of pre-tax expenses are that they reduce your taxable income.
But to keep the math simple, let's say ...
1
vote
1answer
51 views
When estimating revenue from the sales of a new product, should I subtract the lost sales of the old product it replaces? [closed]
I'm deciding whether or not to invest in a project which will add a new production line to my light bulb manufacturing factory. The new production line will produce brighter and longer lasting light ...
3
votes
2answers
134 views
Calculating Profit Ratio (Gross Margin)
When looking at a company's income statement to calculate the Profit Ratio (Gross Margin)
PM = Net Profit / Sales
Do you include "other" revenue in the equation?
Example: XYZ Ltd Income Statement ...
2
votes
4answers
8k views
How do I calculate net monthly salary (after taxes) in Germany?
If I were to say that my yearly, gross salary was 50,000 euros, then what would be my monthly net after-tax income?
For example, this calculator looks OK to me: ...
2
votes
3answers
726 views
Is there a mathematical formula to determine a stock's price at a given time?
I have been trying to find exact information on how stock prices are determined but still I haven't found any exact mathematical formulas how it happens. Wikipedia states:
When prospective buyers ...
6
votes
3answers
126 views
How do you do inflation calculations and estimates?
I'm an engineer, not an accountant so I have no idea what formulas to use (or even the proper terms to google for). I've looked around on a couple of google results, but most of the explanations just ...
6
votes
1answer
152 views
“Out of Pocket Maximum” and health insurance plan terminology & calculation?
I'm trying to understand the terminology on my health plan. I've read numerous websites, which have only confused me more, as they fail to use examples (more than one should be required) for people ...
2
votes
2answers
119 views
What is the effective interest rate on a credit card that offers 0% interest with a 4% balance transfer fee?
I'm about to do a balance transfer that has a fee of 4%. It gives me 0% interest for 14 months. Is it just a straight calculation of 4% for the year or is there another calculation that I need to ...
7
votes
2answers
413 views
How to determine new, lower interest payments after a lump sum mortgage payment, i.e. new amortization schedule?
Here's a financial math problem:
I have a mortgage at about $78,0000 with 5.5% interest and 56 of 360 monthly payments were made. I'm currently paying about $360/month in interest charges. If I pay ...
1
vote
0answers
98 views
Calculating the profit earned from a leveraged futures contract
How do we calculate the profit/loss of Futures contract? For example, If I had a Futures contract that had $10 000 as the underlying, it had $1000 margin and the Futures contract itself was worth $3. ...
7
votes
4answers
207 views
How do you go about calculating how much you need after retirement?
I am posting this question after reading this article on WSJ, where it says:
Just 42% of working-age Americans have even tried to calculate what
they will need in retirement, according to the ...
5
votes
3answers
117 views
Dealing with fractions of a penny
If my car insurance was £1200.01 per year, I could end up being charged £100 + 1/12p per month. I know that's not how it works, the extra penny is kept whole and goes on a specific month instead.
...
9
votes
2answers
3k views
Daily interest calculation combined with monthly compounding: Why do banks do this, and how-to in Excel?
I often see banks advertise (for accounts with fixed yearly interest, let's say 1.5%) – "interested is calculated daily, and compounded monthly".
I have 2 questions:
Why are they calculating ...
5
votes
2answers
150 views
Continuous compounding in practice
A common explanation for the mathematical constant e (2.71828...) is that it is the factor by which an investment would grow at 100% interest rate over a period if it is continuously compounded.
In ...
1
vote
1answer
85 views
Find monthly interest rate from principle, monthly payment, and loan's term?
Is there a formula to find the monthly interest rate required on a compounded interest fixed-rate mortgage loan, given the principle, the monthly payment, and the loan's term?
2
votes
3answers
270 views
Rules of thumb for present value of retirement funds given current age and income?
I know the general rule of thumb is you should save 15% of income to retirement, but I'm playing catch-up after years of neglect and contributing 25% until I catch up again. But how will I know when ...
4
votes
1answer
135 views
What does the “SEC 30-Day Yield” mean for a Bond ETF?
I'm currently a student awaiting admission into grad school and have about $10,000 in a Scott Trade account ready to invest. Because I'll be using the money to pay for moving expenses and anything ...
1
vote
2answers
124 views
Having trouble with APR calculation
I am using the formula listed on the following site to try to calculate APR:
http://www.fdic.gov/regulations/laws/rules/6500-1950.html#fdic6500appendixjtopart226
go to appendix J, if it doesn't auto ...
6
votes
2answers
156 views
Help understanding credit card interest
I have a credit card with an outstanding balance and I am trying to work out when I will complete paying it off.
It is a UK credit card (where I am based) and I do not spend on it. I pay 150 per ...
3
votes
1answer
213 views
How to determine the interest rate?
I'm really not good at math. So please forgive me for this noob question that I have.. Just trying to learn basic percentage calculation with money lending..
Here's an example of how the APR ...
2
votes
2answers
593 views
Formula for calculating real cost of a deductible expense
Nice round numbers: say I perform a job that gets $1000 gross (call this g) in which I incur $100 in expense (call this e). The expense is fully deductible. Assume my marginal tax rate is 25% (call ...
0
votes
2answers
729 views
What is the equation for an inflation adjusted perpetuity?
What is the equation relating an initial investment, a fixed rate of return, an inflation rate, and a perpetual payment adjusted for that inflation rate?
2
votes
2answers
190 views
How are minimum payments calculated for auto loans, education loans, etc.
I'm working on a calculator and I have a good handle on Mortgages (amortization) and Credit Cards (daily average, apr, multiply between 3-5%), but I'm not sure how to calculate minimum payments for ...
0
votes
1answer
116 views
fixed income calculator
where can I find a fixed income investment calculator?
How much income can I expect monthly if I try to live off the interest alone?
Are there any penalties for switching investment strategies?
1
vote
4answers
331 views
How do I calculate a simple moving average for stock prices?
To give a little context, this is for a programming assignment at school so the simplest form of proper moving average is all that's needed. I've searched around and seen the summation formulas and ...
1
vote
1answer
116 views
Calculate APR for under 1 year loan
I was talking with a friend about Payday loans (neither of us is getting one, just merely curious) and the APRs they state aren't really true. So, I was trying to figure out an APR based on the ...
1
vote
1answer
243 views
How to calculate lump sum required to generate desired monthly income?
Suppose my monthly expenses are $500.
I want to ask a charity foundation to finance my scientific research by one-time payment intended to cover all my monthly expenses during my lifetime. How to ...
4
votes
2answers
249 views
How does the Dow Jones Industrial Average (DJIA) divisor change to account for dividends?
The DJIA is a price-weighted index tracking of 30 companies chosen by the Dow Jones Company. It takes the current share price of these 30 stocks and divides by a specific number called the divisor. ...
3
votes
3answers
611 views
How to calculate stock price (value) based on given values for equity and debt?
If a company has $80 million in equity and $20 million in debt, this means that total firm value = D + E = $100 million.
Am I then right to assume that if there are 1 million shares outstanding, then ...
0
votes
2answers
602 views
How to determine duration of a common stock whose dividends grow in perpetuity?
What is the duration of a common stock whose dividends are expected to grow at a constant rate in perpetuity? Specifically, how can I compute this, since the dividends will grow forever?
Update: ...
1
vote
0answers
120 views
Formula to decide when to break a CD?
I'm trying to create a CD comparison tool and have been working on a formula to compare a CD with a higher interest rate to a CD I might own with a penalty period. I believe the basic formula idea:
...
2
votes
1answer
101 views
How to calculate outstanding Graduate Plus Loan balance currently in deferment?
Can someone tell me what I'm doing wrong here?
If I have a $56,500 loan and the interest rate is 7.9% how much will I
owe after 8 months?
I thought this would be fairly simple. I would ...
2
votes
4answers
524 views
How to calculate money needed for a retirement based on an hypothetical death date & expenses?
I would like to know what formula or tool I need to use to calculate the capital needed for a hypothetical retirement that will start at date X and end at date Y.
Here is an example:
Variable1 = ...
3
votes
1answer
665 views
How can I calculate a “running” return using XIRR in a spreadsheet?
I should say that I'm not married to XIRR, I just want to calculate the return on a running basis in a column next to dates, deposits and balances. Here's a screenshot of a simplified spreadsheet in ...
7
votes
3answers
364 views
Is interest of credit cards caculated based on the amount unpaid within the grace period?
From Wikipedia
if a user had a $1,000 transaction and repaid it in full within this
grace period, there would be no interest charged. If, however, even
$1.00 of the total amount remained ...
0
votes
2answers
141 views
Formula for recalculation of a bad loan, i.e. where payments were missed?
I need to know if exists any formula to calculate interest rate, principal interest, total amount to be paid, in the case of a bad loan.
Ex: In a bank exists a 20 year home - loan. The client was ...
2
votes
3answers
541 views
How is interest in my bank account calculated?
I am a software professional. I have one question. How do banks calculate interest on money deposited, if I get, say, 10 % per annum?
Say I deposit say RS.1000 on the 1st day of the month; then I ...
0
votes
1answer
120 views
What's the Effective Interest formula used by this loan calculator?
I used a loan calculator which gives an effective rate of 80.781 whereas wikipedia http://en.wikipedia.org/wiki/Annual_percentage_rate gives a rate of 49% for these parameters:
borrowed: 100
fees: ...
5
votes
1answer
2k views
How to determine contractor hourly rate and employee salary equivalents?
I am aware of the general differences between being an employee and being an independent contractor. However, I am unable to easily compare the two when it comes to after-tax compensation.
Company ...
0
votes
2answers
446 views
How much is my annuity worth? Calculating present (commuted) value of an annuity or pension?
I have a lifetime annuity which adjusts with cost of living increases in my state. Is it possible to compute the present value of this annuity? If so, how might I go about that?
Perhaps I am ...
4
votes
1answer
55 views
Should you work out the yield on property or shares against the purchase price, or the current market price?
In What is a good rental yield?, there's some discussion about whether you should calculate yield by dividing the original purchase price, or the current market price. Which is the correct ...
5
votes
2answers
146 views
Correct calculation for determining real business book value per share?
I'm trying to calculate the real value of a business and, as an example, I picked Netflix.
From their latest financial statements I can see that:
Assets value is: $3,065,709,000
Liabilities value ...
8
votes
2answers
98 views
How do I account for newly added money when computing my rate of return?
I have a simple spreadsheet where I track the balance in my investment account. What should I do to handle new deposits in the account?
For example:
End of Day 1: balance = $100
End of Day 2: ...
0
votes
6answers
427 views
Help me understand the oddity of percentage gains and losses?
If you start with $100K, and you get a 50% gain, it's $150K. Then, you get a 50% loss: now it's $75K. Reverse the order (i.e. lose 50%, gain 50%), it's the same thing (a 25% loss). So, 50% up then ...
8
votes
3answers
888 views
Buying a more expensive house as a tax shelter (larger interest deduction)?
I've heard that some people buy a more expensive house as a tax shelter. In my simple mind I imaging the scenario:
Pay 10,000 annual interest on the mortgage
50,000 annual income
= 40,000 ...
0
votes
1answer
25 views
Understanding company pension plan monthly purchase of funds
A pension based on funds.
What does it mean to add £500 a month to a pension based on funds? Does that mean, I will own an additional £500 worth of that fund each month based on how much of the fund ...
1
vote
1answer
75 views
Calculating the cost of waiting longer for money
I'm trying to calculate the cost of waiting 30 extra days to receive money from a customer. Here's the situation:
How much would this cost a company per year if a customer pays us in 60 days vs. ...
0
votes
2answers
121 views
How many stocks will I own in n years if I reinvest my dividends?
Let's say that I own 1000 shares of a stock at 20$. Every quarter, I get a dividend of 0.20$ which is reinvested (buy more of the same stock). Considering that the stock grows 5% annually, how many ...
