Formulae Flashcards
1
Q
Interest
A
Interest = Amount invested (Principal) x Interest rate per year x Time period, or I = P x R x T
2
Q
Effective Yield
A
Effective Yield =
((Total Future Value – Original Investment)
÷ Original Investment) x 100
3
Q
TDSR
A
TDSR =
[ (Monthly housing costs) + (all other monthly debt payments) ]
÷ (Gross monthly income)
4
Q
GDSR
A
GDSR =
[ (Monthly mortgage payment) + (1/2 condo fee) + (Property tax) + (Heat) ]
÷ (Gross monthly income)
5
Q
Real Rate of Return
A
Real Rate of Return =
[ i - inflation ]
÷ [ 1 + inflation ]
6
Q
After-Tax Rate of Return
A
After-Tax Rate of Return =
i * (1 - MTR)
7
Q
Real After-Tax Rate of Return
A
Real After-Tax Rate of Return =
[ i * (1 - MTR) - inflation ]
÷ [ 1 + inflation ]
