Financial Calculator Formula Reference

This reference explains the core mathematics used across CorporateTrader calculators. It is designed for readers, educators and publishers who want to reproduce or audit an estimate. Every result still depends on user inputs and stated assumptions.

Investment growth

Compound interest

Future value = Principal × (1 + rate per period)^{number of periods}

Use consistent periods: a monthly rate with monthly periods, or an annual rate with annual periods.

Systematic investment plan

For beginning-of-month contributions, the annuity-due estimate is FV = P × [((1+r)^n − 1) ÷ r] × (1+r), where P is the periodic contribution, r the periodic assumed return and n the contributions. Market returns are not fixed or guaranteed.

CAGR

CAGR = (Ending value ÷ Beginning value)^(1 ÷ years) − 1. CAGR smooths a path into one annual rate and does not show volatility.

XIRR

XIRR finds the annual discount rate that makes the net present value of dated cash flows equal to zero. Exact dates matter, and some cash-flow patterns may have no unique solution.

Loans and amortization

For a fixed-rate amortizing loan: M = P × r(1+r)^n ÷ ((1+r)^n − 1). P is principal, r the monthly rate and n monthly payments. Taxes, insurance, fees, PMI and HOA costs are separate unless explicitly added.

Stock average price

Weighted average price = Σ(price × quantity) ÷ Σ(quantity). Brokerage, taxes and charges must be added separately when calculating full cost basis.

Trading risk

Permitted risk = Account value × Risk percentage. Position size = Permitted risk ÷ |Entry − Stop|. For a long trade, reward/risk is (Target − Entry) ÷ (Entry − Stop); for a short trade it is (Entry − Target) ÷ (Stop − Entry). Gaps and slippage can make actual loss larger.

Electricity and solar

Energy in kWh = Watts ÷ 1,000 × Hours; cost equals kWh multiplied by the user’s tariff. Solar payback models should distinguish self-consumed energy from exported energy and use location-specific production from a credible model such as NREL PVWatts where applicable.

Primary references

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You may link to this reference when explaining calculator methodology. Do not present an estimate as guaranteed financial, tax, engineering or investment advice. If you find an error, use the corrections process.