Financial & Banking Formula Engine
1. Time Value of Money (TVM) & Interest Logic
| Financial Concept | KaTeX Rendered Notation | Variable Identification |
|---|---|---|
| Simple Interest | $$I = P \cdot r \cdot t$$ |
\(I\): Interest, \(P\): Principal, \(r\): Annual Rate, \(t\): Time (Years) |
| Compound Interest (FV) | $$FV = P \left(1 + \frac{r}{n}\right)^{nt}$$ |
\(FV\): Future Value, \(n\): Intervals per Year |
| Present Value (PV) | $$PV = \frac{FV}{\left(1 + \frac{r}{n}\right)^{nt}}$$ |
Discounting structural future cash to current metrics. |
| Effective Annual Rate | $$EAR = \left(1 + \frac{r}{n}\right)^n - 1$$ |
True annualized yields accounting for periodic compounding. |
2. Mortgage Banking & Lending Ratios
| Financial Concept | KaTeX Rendered Notation | Variable Identification |
|---|---|---|
| Amortized Installment (EMI) | $$EMI = \frac{P \cdot r \cdot (1+r)^n}{(1+r)^n - 1}$$ |
\(P\): Loan Asset, \(r\): Monthly Rate, \(n\): Total Months |
| Debt Service Coverage | $$DSCR = \frac{\text{Net Operating Income}}{\text{Total Debt Service}}$$ |
Measures asset capacity to survive structural leverage obligations. |
| Net Interest Margin | $$NIM = \frac{\text{Interest Income} - \text{Interest Expense}}{\text{Average Earning Assets}}$$ |
Tracks essential profit generation efficiency inside lending institutes. |
3. Capital Budgeting & Asset Pricing Models
| Financial Concept | KaTeX Rendered Notation | Variable Identification |
|---|---|---|
| Net Present Value | $$NPV = \sum_{t=1}^{T} \frac{CF_t}{(1 + r)^t} - I_0$$ |
\(CF_t\): Cash flow period \(t\), \(I_0\): Structural Capital Outlay |
| Capital Asset Pricing (CAPM) | $$E(R_i) = R_f + \beta_i \left[ E(R_m) - R_f \right]$$ |
\(R_f\): Risk-free asset yield, \(\beta_i\): Systematic Asset Risk |
| Weighted Average Capital Cost | $$WACC = \left(\frac{E}{V} \cdot R_e\right) + \left(\frac{D}{V} \cdot R_d \cdot (1 - T_c)\right)$$ |
\(V = E + D\), \(T_c\): Marginal corporate tax percentage rate |