Finance Formulas
Interest, loans, investments, ROI and essential financial calculations
Compound Interest
A = P(1 + r/n)^(nt)
P = Principal, r = annual rate
n = compounding frequency, t = time
Simple Interest
SI = P × R × T / 100
A = P + SI
P = Principal, R = Rate %, T = Time (years)
EMI (Loan Payment)
EMI = P × r(1+r)^n / ((1+r)^n - 1)
r = monthly interest rate
n = total number of months
SIP Returns
FV = P × [(1+r)^n - 1] / r × (1+r)
P = monthly investment
r = monthly rate, n = months
Return on Investment
ROI = (Net Profit / Cost) × 100
Net Profit = Final Value - Initial Cost
Higher ROI = better investment
Net Present Value
NPV = Σ [Ct / (1+r)^t] - C0
Ct = cash flow at time t
r = discount rate, C0 = initial cost
Rule of 72
Years to double = 72 / Rate%
Example: 8% rate → 72/8 = 9 years
Quick mental estimate for doubling time
Debt-to-Income Ratio
DTI = Monthly Debt / Gross Income × 100
DTI < 36% is generally healthy
Used by lenders for loan approval