Understanding Risk vs. Reward Investing money into the markets has a high degree of risk and you should be compensated if you're going to take that risk. If somebody you marginally trust asks for a $50 loan and offers to pay you $60 in two weeks, it might not be worth the risk, bu...
Simple interest is a way to calculate how much interest will be charged on a sum of money at a specific rate and for a particular time duration. The interest rate will not be modified by any interest accrued; it will only apply to the principal amount of the loan or investment. Simple ...
Tip If your loan specifies the annual rate but not the periodic rate, you can calculate the periodic rate by dividing the annual interest rate by the number of payments per year. For example, if you had a loan with an annual interest rate of 9.6 percent and monthly repayments, you would...
The calculation for the present value of a lump sum is used when a business wants to calculate how much money it should pay for an investment today if it will generate a certain lump sum cash flow in the future, given an interest rate and a certain period of time. Calculating the presen...
Yes. Insurers look at your credit score when quoting a car insurance premium. Generally, your credit score is used to determine whether you have poor credit and are a risk when it comes to paying back a personal loan, credit card debt and more. However, auto insurance companies use your ...
How to Calculate ROIC Here are the steps to use to calculate ROIC via an example. XYZ Corporation has $30,000 on its income statement as its EBIT and its marginal tax rate is 28%. The firm has $35,000 in short-term and long-term debt and $65,000 in equity financing. It has $1...
Either method of calculating net profit margin is acceptable, but you should use the same math across firms to make an equal comparison. All firms should be compared on the same basis. Each calculation would work like this: Option 1: Net income after taxes ÷ revenue = net profit margin. ...