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Modified on
Sat, Mar 23, 2013, 5:47 PM
by
Administrator
Categorized as
Algorithms, General Information, Microsoft Office

IMPORTANT NOTE REGARDING INTEREST RATES AND APR

1. In the following formulas, the interest rate is the PERIODIC rate. Thus, if

2. Banks typically calculate APR as COMPOUNDED YEARLY. Thus if

1. In the following formulas, the interest rate is the PERIODIC rate. Thus, if

`N`

is in months, then the interest rate should be PER MONTH.2. Banks typically calculate APR as COMPOUNDED YEARLY. Thus if

`N`

is in months, then the interest rate you use should be `APR/12`

.Annuity Calculation in Excel |

Function AnnuityToPvRatio(i As Double, N As Integer) As Double Dim fp As Double fp = FutureToPvRatio(i, N) AnnuityToPvRatio = (i * fp) / (fp - 1) End Function Function FutureToPvRatio(i As Double, N As Integer) As Double FutureToPvRatio = (1 + i) ^ N End Function

i (1+i)^N A/P = --------------- (1+i)^N - 1 i (F/P) = ------------- (F/P) - 1

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