Exam (elaborations)
MAC2602 Formulae
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These are important formulae to be studied in conjunction with the other study materials. Once understood your chances of passing this module is greatly enhanced.
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HMS 1FORMULA SHEET – MAC2602
QUESTION 1 - TIME VALUE OF MONEY (TVM)
1. SIMPLE INTERST: I=PxRxT → I = simple interest, P = principal, R = interest rate and T = time
2. COMPOUND INTERST: I = P(1+i) → I = compound interest, P = principal and i = interest rate
3. FUTURE VALUE (SINGLE PAYMENT – 1 PERIOD): FV = PV(1 + i) → FV = future value, PV = present value, i = interest rat
n
4. FUTURE VALUE (SINGLE PAYMENT – MULTIPLE PERIODS): FV = PV(1 + i) → FV = future value, PV = present
value, i = interest rate and n = Number of years/periods
5. FUTURE VALUE (ORDINARY ANNUITY): → I = Annuity amount or payment, i = Interest rate, n =
Number of years or periods
11. PERIODIC RATE:
6. FUTURE VALUE (ANNUITY DUE):
12. EFFECTIVE INTEREST RATE
7. PRESENT VALUE (SINGLE PAYMENT):
13. NOMINAL RATE
8. PRESENT VALUE (ORDINARY ANNUITY):
14. INTERPOLATION
9. PRESENT VALUE (PERPETUITY):
15. EXTRAPOLATION
10. PRESENT VALUE (ANNUITY DUE):
16. PERIODIC PAYMENT (PMT)
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