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FM Basic formulae

  • SSP 

$i = \frac{AV_{t+1}-AV_{t}}{AV_t}$     $d = \frac{AV_{t+1}-AV_{t}}{AV_{t+1}}$

$i_{real}= \frac{i-\pi}{1+\pi}$     i=annual rate of return, $\pi$ = rate of inflation

$v = \frac{1}{1+i}$     $d = \frac{i}{1+i}$     $i=\frac{d}{1-d}$   $1-v = d$     $(1+i) = (1-d)^{-1}$

$ \delta_{t} = \frac{\frac{\mathrm{d} }{\mathrm{d} t}A(t)}{A(t)}$     $\delta =ln(1+i)$     $e^{\delta} = 1+i$     $e^{-\delta}=v$

$AVF_{t1,t2} = e^{\int_{t1}^{t2}\delta_tdt}$     $PVF_{t1,t2} = e^{-\int_{t1}^{t2}\delta_tdt}$

$\left [ 1+\frac{i^{(p)}}{p} \right ]^p = (1+i)$

$\left [ 1-\frac{d^{(p)}}{p} \right ]^p = (1-d)$

$a(t) = (1+i)^t  $   (Compound Interest)

$a(t) = (1+it)  $      (Simple Interest)          $a(0) = 1  $

$A(t) = ka(t)$

$d < d^{(2)} < d^{(4)} < d^{(12)} < ….< \delta <….< i^{(12)} <  i^{(4)} <  i^{(2)} < i $