Determine if the call option is "in the money." To be in the money, the current share price of the underlying stock must be above the strike price of the call option. In this case, the IBM call option is in the money. Step 4 Calculate the in-the-money amount by subtracting the ca...
IRR or money-weighted returns = -8% This tells the investor about what she actually earned on the money invested for the entire three year period. Note that this return is negative because a significantly large amount of money was invested in the year of negative returns compared to other ye...
The interest is what lenders charge you to borrow money — it’s usually expressed as a percentage. The principal balance is the loan amount itself. How to calculate simple interest on a loan If a lender uses the simple interest method, it’s easy to calculate loan interest. You will need...
Calculate any tax credits you have. Subtract the credits from the amount of tax you owe. For example, if you qualify for a $1,000 saver's credit and a $3,000 education credit, your $33,600 tax liability decreases to $29,600. Inspect your W-2s to determine how much your employer(s...
How to calculate total loan costs The total cost of a loan depends on theamount you borrow, how long you take to pay it back and theannual percentage rate. The APR is the most important factor — it reflects the total amount you’ll pay for borrowing money. This includes the interest ...
The money that you have today is worth more than money you will receive in the future. Parameters to Calculate Time Value of Money pv→ pvthePresent Valueor the amount of money you currently have. fv →fvtheFuture Valueof the money that you currently have. ...
A company's capitalization is the amount of money it has raised by issuing stock or debt, and those choices impact its TIE ratio. Businesses consider thecost of capitalfor stock and debt and use that cost to make decisions. Companies that have consistent earnings, like utilities, tend to bor...
To calculate ROI, the benefit (or return) of an investment is divided by the cost of the investment. The result is expressed as a percentage or aratio. Key Takeaways Return on Investment (ROI) is a popular profitability metric used to evaluate how well an investment has performed. ...
DTI is a key measure lenders use to determine whether someone is a good candidate for a loan. This ratio compares the amount of money a person owes (including monthly payments on mortgages and other debts) to their monthly income. Generally speaking, the lower a person's DTI, the better ...
An exchange rate lets you calculate how much currency you can buy for a certain amount of money or how much money you must spend for a certain amount of the currency.