DE LA SALLE LIPA ________________________________________________________________________

Formulas in Business Math

Simple Interest: Simple Discount:

I = Prt D = Fdt
𝐼 =𝐹−𝑃 𝐷 =𝐹−𝑃
F=P+I P=F–D
F = P(1 + rt) P = F(1 – dt)
𝐼 𝐷
𝑡= 𝑑=
𝑃𝑟 𝐹𝑡
𝐹−𝑃 𝐹−𝑃
𝑡= 𝑑=
𝑃𝑟 𝐹𝑡
𝐼 𝐷
𝑟= 𝑡=
𝑃𝑡 𝐹𝑑
𝐹−𝑃 𝐹−𝑃
𝑟= 𝑡=
𝑃𝑡 𝐹𝑑
𝐼 𝐷
𝑃= 𝐹=
𝑟𝑡 𝑑𝑡
𝐹 𝐹−𝑃
𝑃= 𝐹=
(1+𝑟𝑡) 𝑑𝑡
𝑃
𝑃 =𝐹−𝐼 𝐹=
(1 – 𝑑𝑡)
𝑑
𝑟=
1 – 𝑑𝑡
𝑟
𝑑=
1 + 𝑟𝑡

Compound Interest: Compound Amount at a Fraction of a Period:

𝑟
𝑖= Step 1: F1 = P(1 + i)n
𝑚
Step 2: F = F1(1 + rt)
n = t(m)
F = P(1+i)n Present Value at a Fraction of a Period:
𝐹
𝑃= or P = F(1 + i) –n Step 1: P1 = F(1 + i) –n
(1+𝑖)𝑛
Step 2: P = P1(1 + rt)

Time in Compound Interest: Nominal Rate of Compound Interest:

𝐹 1
𝑙𝑜𝑔(𝑃) 𝐹 𝑛
𝑛= 𝑖= (𝑃) −1
log(1+𝑖)
𝑟
and since n = tm, and since 𝑖 = ,
𝑚
𝑛
therefore, 𝑡 = therefore, r = i(m)
𝑚

Effective Rate: Nominal Rate:

𝑟 𝑚 1
𝑢 = (1 + ) − 1 𝑟 = 𝑚 [(1 + 𝑢)𝑚 − 1]
𝑚

Continuous Compounding:
𝐹 = 𝑃𝑒 𝑗𝑡
𝑃 = 𝐹𝑒 −𝑗𝑡

Page 1 of 1