Khan academy

Question 1

What is the formula for Compound Interest ?

Answer 1

X = future amount of money
A = principal
y = interest (yearly)
n = number of years

X= A * (100% + y)^n

Question 2

What is the rule of 72 ?

Answer 2

Rough estimation of time required to double the money with Compound Interest

Years = 72 / (yearly interest in percents)

Question 3

What is the formula for Simple Interest ?

Answer 3

X = Total amount of money to pay back
A = principal
y = interest (yearly)
n = number of years

X= A * (100% + n*y)

Question 4

What is relationship between Assets, Liabilities and Equity ?

Answer 4

Assets = Liabilities + Equities

Question 5

What is leverage ?

Answer 5

In finance, leverage (sometimes referred to as gearing in the United Kingdom and Australia) is a general term for any technique to multiply gains and losses.[1] Common ways to attain leverage are borrowing money, buying fixed assets and using derivatives.[2] Important examples are:
A public corporation may leverage its equity by borrowing money. The more it borrows, the less equity capital it needs, so any profits or losses are shared among a smaller base and are proportionately larger as a result.[3]
A business entity can leverage its revenue by buying fixed assets. This will increase the proportion of fixed, as opposed to variable, costs, meaning that a change in revenue will result in a larger change in operating income.[4][5]
Hedge funds often leverage their assets by using derivatives. A fund might get any gains or losses on $20 million worth of crude oil by posting $1 million of cash as margin.[6]

Question 6

Why banks require partial payment done by byuer for house when they give credit (20, 25, 30% ) ?

Answer 6

Это страховка, если они заберут квартиру, то смело могут продавать ее с уценкой на эти 20, 30 процентов и при этом все еще вернуть себе кредит