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.

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2
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2answers
72 views

How can we determine how much income our savings could generate if we purchase an annuity?

I am 62 and my wife is 56. We have almost 1.5 M in retirement investment and 250 K in non retirement investments. I was wondering if we both retire in 6 years and turn all our investment into annuity, ...
1
vote
0answers
37 views

Excel Canadian Mortgage Formula Help

I need to get the ending balance formula for a project in excel calculating mortgage payout. I am hoping to develop a formula instead of formulating an amortization table. I have used the following ...
1
vote
1answer
88 views

Calculate the optimum contribution to Provident Fund(PF) account

I am fresh out of college and started working and want to work out how much I should contribute to my Provident Fund account to maximize the benefit from tax deductions. I am from India, so for those ...
9
votes
4answers
377 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 ...
1
vote
1answer
235 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: ...
1
vote
1answer
39 views

How do I calculate the return on my stock _call_ option, similar to my _put_ example?

I'm trying to figure out the effective percentage return when I write ("sell to open") a stock call option. I think I've figured it out for put options. Consider this put example I think XYZ stock ...
0
votes
2answers
184 views

Formula for how to distribute a loan payment between multiple loans such that the remaining principal accrues the least interest?

Assume 4 loans (Balance @ p.a. interest): $10,000 @ 5.5% $5,500 @ 7.25% $2,000 @ 5.5% $1,000 @ 4.5% If I am looking to pay $7,250 towards principal only, how would I calculate the ...
0
votes
3answers
58 views

Personal Loan issuer online service

I have chunk of money that I would like to loan to my brother. I would like to charge him interest same as banks do. Is there a website or online service where I can enter the "loan" amount, ...
9
votes
3answers
2k 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
3answers
32 views

IRR Calculation

I have a series of cash flows, a $1000 deposit, and then 5 annual withdrawals of $500,$400,$200,$200,and finally, $100. I understand this is an IRR calculation, and set it up as follows: ...
1
vote
0answers
31 views

How does Value get rounded in figuring out Bonds Value?

I was reading up on Bonds here on About.com Why Do Bond Prices and Yields Move in Opposite Directions? In the second example it offers: In this example, the opposite scenario occurs. The same ...
0
votes
1answer
47 views

How can I calculate minimum payment on quick loan? [closed]

I am working on calculator for quick loans. Client can select how much he will pay monthly. Base on it payment schedule will be calculated. Payment interest depends on 1 payment period. Number of ...
-2
votes
1answer
122 views

Which of these unrealized profit calculations is correct? And, why other calculations are wrong?

Which of these unrealized profit calculations is correct? And, why other calculations are wrong? @ $10 per unit, $1000 - Subscription (100 units) $0500 - Cash dividend (50 units) $0500 - Reinvested ...
1
vote
1answer
162 views

Find monthly interest rate from principal, 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 principal, the monthly payment, and the loan's term?
2
votes
2answers
3k views

What is the equation for an inflation adjusted annuity held in 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
7k views

How do I calculate yield-to-maturity (YTM) with a simple handheld calculator?

Is there a way to calculate yield-to-maturity (YTM) using just the payments (not all equal) with just a simple handheld calculator and without using Excel?
5
votes
3answers
400 views

Is this the correct math for estimating federal taxes using marginal tax brackets?

(I updated this because I think I wasnt making myself clear in the first part of the question and I clarified what I'm trying to do. I'm just looking to use marginal tax brackets to derive a good ...
4
votes
1answer
391 views

How do we correctly sum up returns

Assume I have done 8 trades and calculated the profit (or loss) of each trade: Balance PnL 100 102 2.00% 105 2.94% 103 -1.90% 101 -1.94% 98 -2.97% 97 ...
3
votes
1answer
44 views

How should I include pension contributions in my UK Child Benefit calculations?

I'm using the gov.uk Child Benefit Tax Calculator and I don't know how I include my pension contributions in the "Pension contributions deducted from your pay" and "Pension contributions not paid from ...
5
votes
2answers
149 views

Am I doing the math for this covered call/long put strategy correctly? What risks do I run with this strategy?

In this trade, I write an in-the-money covered call and buy an in-the-money put (as an example) on GM, expiring in September 2014. The call premium is $10.02 with a strike of $26, and the put premium ...
7
votes
2answers
741 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 ...
9
votes
7answers
390 views

What single metric is the ultimate measure of personal wealth?

More specifically, what is the single metric you would use to monitor personal wealth?
1
vote
3answers
97 views

What is the meaning of “$N industry”?

For example, in the sentence "Semiconductor fabrication is a $100 billion industry.", what exactly is being said?
-1
votes
1answer
102 views

How to calculate forward price for asset with dividend?

I have this exercise question: A particular forward contract costs nothing to enter into at time t and obliges the holder to buy the asset for an amount F at expiry T. The asset pays a dividend DS at ...
4
votes
3answers
125 views

How can I calculate yearly interest of my investment gain?

I'm trying to figure out the yearly interest of a potential investment. Lets say I invested $10 000, 13 days later i cash out and I now have $10 500. The interest here is 4,76% for 13 days. But can I ...
2
votes
2answers
108 views

How to calculate whether it's better to pay my education loan, or my home investment loan?

I have an education loan @ 11.5 % for 1,000,000. I can pay it in 3 years. I am planning to make an investment by buying a home @ 10.5% for 2,200,000. Term = 20 yrs. I am thinking if I sell the house ...
6
votes
3answers
612 views

What is the “rule of 70” or “rule of 72” with regards to investment, and how do I apply it?

What is the "rule of 72" (sometimes called the "rule of 70") with regards to investment, and how do I apply it?
3
votes
3answers
480 views

Negative properties of continuously compounded returns

I'm taking an intro to quant finance course online. I'm trying to better understand the properties and uses of continuously compounded returns. Specifically for this question, how can you have ...
2
votes
2answers
339 views

When to use geometric vs. arithmetic mean? Why is the former better for percentages?

While computing the average price of a stock or index over a period of time, I have the choice between using an arithmetic mean or a geometric mean. Which should I use and when? I am reading a book ...
0
votes
1answer
134 views

Google Finance: Input Parameters For Simple Moving Averages

I'm having some trouble understanding the simple moving average lines that can be added to a quote graph from Google finance. This related Stack Exchange question indicates that the only input ...
2
votes
2answers
131 views

How to calculate ROI on investments? [duplicate]

I looked through the previous questions, and couldn't find one that quite addresses my question. If I start with $1000, and through investing it goes to $1200(100 shares at $10 go to $12), I can say I ...
4
votes
5answers
31k 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: ...
3
votes
2answers
146 views

How can I calculate (approximate) the future value of my investments? Is this formula appropriate?

I want to check to see if I'm meeting my investment goals, so I want to project forward my assets given a growth rate and a monthly deposit amount. What is the best formula to use for this? Is this ...
1
vote
1answer
72 views

How can I check if my mortgage balance is correct?

Since I couldn't easily get my unpaid principal balance, I calculated my mortgage balance using a handful of online calculators. Today I took a look at the actual balance, and was rather surprised to ...
1
vote
1answer
57 views

Reasonable alternatives to using the Treasury rate as the risk free rate, e.g. for CAPM calculation?

For all practical purposes, the risk free interest rate is taken to be the short term Treasury bill interest rate. Let's say this rate is 0.5% per annum. But for an individual investor, if his bank ...
5
votes
3answers
1k views

In the event of a corporate spin-off, how can I calculate the correct cost basis for each company's shares?

Consider this example: Siemens is going to have a spin-off (next Monday). If I owned, say, 10,000 shares of Siemens bought at an average price of 80 euros, my cost would be 800,000 euros. In the ...
2
votes
1answer
1k views

How do you calculate the P/E ratio by industry?

I would like to know how to calculate the P/E ratio by industry. On this website, it displays the P/E ratio for the current stock, the industry and the sector: FINANCIALS DTV.O ...
3
votes
1answer
118 views

How to determine withholding so at end of the year I neither owe more, nor get a refund?

A while back I was on a W2 job and I would get a large sum on my tax return. At one point I found a calculator that helped me figure out how to configure my W4 so that I would neither owe nor be owed ...
1
vote
1answer
126 views

How to calculate how far a stock price can drop before a broker would issue a margin call?

Let's say the margin requirement for a stock XYZ is 50%. The current price of XYZ is $150/share. Let us say I put in $100, and borrow $50 from the broker to buy a share. Typically, how far can the ...
2
votes
4answers
1k 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 = ...
1
vote
2answers
104 views

Suppose earning an APR of 7% for 5 years, with interest compounded quarterly. What is the EAR? What is the Total Return?

Suppose you earn an APR of 7% for 5 years, with interest compounded quarterly. What is your EAR? What is your Total Return? The part I am confused is "with interest compounded quarterly" The ...
1
vote
2answers
156 views

Calculating accumulated value of an annuity with changing payments?

In a series of 40 payments the first 10 payments are 10 each, the second 10 payments are 20 each, the third 10 payments are 30 each, and the final 10 payments are 40 each. The payments are equally ...
3
votes
2answers
174 views

Need a formula to determine monthly payments received at time t if I'm reinvesting my returns

I need a formula for how much money I will be receiving monthly and how much I will have in total for any time t (in months). The following is my scenario: I will be investing $900 monthly into a 3 ...
2
votes
1answer
164 views

Am I doing the math for this long straddle strategy correctly?

I'm looking at making a long straddle trade, and I'm trying to make sure I have the math correct before making the trade. Here are the details in the example I want to work out: I'm using options on ...
1
vote
1answer
42 views

When performing wash sale calculations does time of day matter?

For wash sales, I've read there is a 30-day window both before and after an opening trade during which a loss from a closing trade becomes a wash sale with respect to the opening trade's cost basis ...
1
vote
0answers
86 views

What are the standard industry practices or disclosures for computing compounded interest on retail deposit accounts in the United States?

I'm seeking to understand how my bank calculates the interest on my various deposit accounts (Money Market, Interest Checking, Savings, Certificate of Deposit) in order to simulate and predict it to a ...
6
votes
5answers
4k views

Why do mortgage affordability recommendations use gross income?

Whenever I see someone ask how to calculate how big a mortgage he can afford, the answer almost always comes back as a percentage of gross income. Why use gross income as the baseline? Why not net ...
3
votes
3answers
169 views

I'm a programmer and need a formula for calculating overal ROI [duplicate]

I'm programming a web app to track my hedge fund performance. I'd like to find my overall ROI for all time. If I had a beginning balance and my current balance then finding the ROI is easy. For ...
0
votes
2answers
551 views

Choosing between two car deals on the same car - NPV

This is basic question, but I have starred myself blind on it - I am stuck. I am not sure which formulae I should use. Here is the story. I am looking to buy a car. I have found two dealerships ...
2
votes
2answers
204 views

How does this retirement fund calculator work?

I found a retirement fund calculator on web: Inflation rate: 2% 0% 2% 0% Expected return rate: 5% 0% 0% ...