Compound Annual Growth Rate (CAGR) The compound annual growth rate (CAGR) is used for most financial applications that require the calculation of a single growth rate over a period. What is the CAGR if your investment portfolio has grown from $10,000 to $16,000 over five years? PV =...
For example, let's say that a student obtains a simple interest loan to pay for one year of college tuition. The loan amount is $18,000. The annual interest rate on the loan is 6%. The term of the loan is three years. Using the simple interest formula above, the amount of simple ...
You can calculate your total interest by using this formula: Principal loan amount x Interest rate x Loan term in years = Interest For example, if you take out a five-year loan for $20,000 and the interest rate on the loan is 5 percent, the simple interest formula would be $20,000 ...
Simple interest is computed annually as apercentageof the principal sum. The annual interest rate, the duration of the investment or loan, and the principal amount are multiplied to determine simple interest. What is the Simple Interest Formula? If you know the principal amount, the rate of int...
APR (annual percentage rate):The rate someone tells you (“12% per year!”). You’ll see this as “r” in the formula. APY (annual percentage yield):The rate you actually get after a year, after all compounding is taken into account. You can consider this “total return” in the ...
For example, say you invest $100 (the principal) at a 5% annual rate for one year. The simple interest calculation is: $100 x .05 interest x 1 year = $5 simple interest earned after one year Note that the interest rate (5%)appears as a decimal(.05). To do your calculations, you...
The most basic type of interest is simple interest solely based on the principal balance. Simple interest can be calculated with the simple interest formula where the principal is multiplied by the interest rate and period of time. For example, a simple interest loan for the amount of $1...
Rate of interest = R = 10% Time for which it is borrowed = T = 1 year The formula to calculate the Simple Interest for one year, Simple Interest (SI) = \[\frac{(P\times R\times T)}{100}\] Thus, the Simple Interest for a year, (SI) = \[\frac{(P\times R\times T)}{10...
In the case of Simple Interest, the formula is: Simple Interest = Principal * Rate of Interest (annual) * Time Period (annual) Thus, the formula for finding Simple Interest in Excel becomes: =<cell with principal value>*<cell with rate of interest>*<cell with time period> ...
This formula was originally published by van den Dool and Dec. Kratz in 1963 [72]. The procedure for this application was validated and is described in depth in a previous work [62]. The retention index I is calculated using retention times of the sample (X) and the earlier and later ...