Compound Interest Fundamentals
Compound interest earns returns on both principal and accumulated interest. Time, rate, and compounding frequency jointly determine future value.
Interest, amortization, and savings fundamentals that support personal and business finance calculators.
Compound interest earns returns on both principal and accumulated interest. Time, rate, and compounding frequency jointly determine future value.
Amortization spreads loan repayment over time. Early payments apply mostly to interest; later payments apply more to principal on a typical fixed-rate schedule.
DCF values a business by discounting projected free cash flows plus a terminal value at WACC.
NPV sums discounted cash flows; positive NPV suggests value creation at the hurdle rate.
IRR is the implied return of a cash flow series; compare it to your hurdle rate or WACC.
WACC is the average return required by all capital providers weighted by market values.
Payback measures how long until cumulative cash flows recover the initial investment.