**1. Compound Interest**

Formula:

A = P * (1+r/t) ^ (nt)

Where

A = amount after time t

P = principal amount (your initial investment)

r = annual interest rate (divide the number by 100)

t = number of years

n = number of times the interest is compounded per year

**2. Post Tax Return**

Formula:

Return = Interest rate - (Interest rate*tax rate)

**3. Inflation**

Formula:

Future Amount=Present amount*(1+inflation rate)^number of years

**4. Purchasing Power**

Formula:

Future Value=Present value/(1+inflation rate)^number of years

**5. Effective Annual Rate**

Formula: Effective Annual Rate = (1+(r/n))^n)-1*100

Where

r = nominal return divided by number of times compounding is done in a year

n = number of times compounding is done in a year

**6. Rule of 72**

The thumb rule is divide 72 by the interest rate

EXAMPLE

If you are assuming a 12 per cent return on your investment,

the number of years in which the money will double is

= 72/Interest rate = 72/12 = 6 years

**7. Compounded Annual Growth Rate (CAGR)**

Formula:

CAGR=((FV/PV)^(1/n)) - 1

Where

FV is the investment's ending/maturity value

PV is the investment's beginning/opening value

n is the duration in years

**8. Loan EMI**

Formula:

EMI= (A*R)*(1+R) ^N/ ((1+R) ^N)-1)

Where

A = Loan amount

R = Interest rate

N = Duration

**9. Future Value of SIP**

Formula:

S = R((1+i)^n-1/i) (1+i)

Where

S = Future value of investment

R = Regular monthly investment

i = Interest rate assumed /12

n = Duration (number of months or number of years *12)

**10. Liquidity Ratio**

Formula:

Liquidity Ratio = Total liquid assets/Total current debt