An amortization formula is based on the formula for calculating the value of an annuity. From this basic formula, you can determine the monthly payment on a fully amortizing loan. You can further modify it to get formulas that yield the remaining principal, the principal paid in a particular ...
Every prospective homeowner should also take a look at an amortization schedule and/or a mortgage calculator to determine exactly how payments apply in their particular situation. Simply knowing your interest rate is not enough to make an educated decision on a loan product, let alone buying real ...
For the first payment, we already know the total amount is $1,342.05. To determine how much of that goes toward interest, we multiply the remaining balance ($250,000) by the monthly interest rate: 250,000 x 0.416% = $1,041.67. The rest goes toward the mortgage balance ($1,342.05 -...
To determine your free cash flow, subtract the cost of your company’s capital expenditures within the accounting period (including property, plant, and equipment expenses and debt servicing) from its net operating profit after taxes (including net income, depreciation, amortization, and working ...
The first ratio, ROI (Return on Investment), measures the profitability of a business’s invested capital. Invested capital consists of net working capital plus fixed assets. This index is critical for business owners, as it is a useful metric to determine how much a business earns from its ...
A tax amortization benefit is the cash flow generated from an asset as a result of being able to write off the full fair value of the asset for tax purposes. This benefit can affect the fair value of an asset by as much as 20 to 30 percent. For example,
Merrill Lynch, Pierce, Fenner & Smith Incorporated (also referred to as “MLPF&S" or “Merrill") makes available certain investment products sponsored, managed, distributed or provided by companies that are affiliates of Bank of America Corporation (“BofA Corp."). MLPF&S is a registered bro...
Identify and define the three characteristics of an asset that must be established to determine periodic depreciation, depletion, or amortization. How are the taxes paid under MACRS different from that paid under straight-line depreciation? Define or describe the following term: Depreciation. ...
Goodwill officially has an indefinite life but impairment tests can be run to determine if its value has changed due to an adverse financial or publicity event. These events can include a negative PR situation, financial dishonesty, or fraud. The amount decreases the goodwill account on the bal...
To calculate the property's ROI: Divide the annual return by your original out-of-pocket expenses (the downpayment of $20,000, closing costs of $2,500, and remodeling for $9,000) to determine ROI. ROI = $5,016.84 ÷ $31,500 = 0.159. Your ROI is 15.9%. Home Equity Some inves...