Continuous Compounding

Normally when computing compound interest the compounding period is a discrete interval, annually, quarterly, monthly, weekly etc. There is nothing however to stop the compounding period getting smaller and smaller until eventually interest is calculated on the balance of the principal amount plus accumulated interest on a continuous basis.

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NPV and Taxes

The NPV (net present value) of an investment is calculated by adding together the present value of each of the individual cash flows associated with the investment. The purpose of this tutorial is to discuss the effect of taxation and depreciation on each of the investment cash flows and, as a result, on the NPV of the investment itself.

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Excel PV Function

The Excel PV function is one of many Excel financial functions, and can be used to calculate the present value in excel of a lump sum, an annuity, or an annuity due. It has the syntax PV (Rate, Nper, Pmt, FV, Type).

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Excel RATE Function

The Excel RATE function is used to calculate the discount rate (i) in time value of money calculations. For example, it can calculate the interest rate on a loan given the value of the loan, the term and the periodic payments, it can be used to calculate the interest rate earned on a savings account, or the interest rate needed to generate annuity payments from a lump sum investment.

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Excel FV Function

The Excel FV function is one of many Excel financial functions, and can be used to calculate the present value in excel of a lump sum, an annuity, or an annuity due. It has the syntax FV (Rate, Nper, Pmt, PV, Type).

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