List of Financial Equations

Posted on September 8, 2026 by Dr. David Edward Marcinko MBA MEd CMP™

By Dr. David Edward Marcinko; MBA MEd

SPONSOR: http://www.MarcinkoAssociates.com

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Below is a consolidated list of commonly used financial equations across different areas of finance.

1. Banking & Loan Formulas

  • Loan EMI: EMI = [P × r × (1+r)ⁿ] / [(1+r)ⁿ – 1]
  • Compound Interest: FV = PV × (1 + r)ⁿ
  • Simple Interest: SI = P × r × t
  • Present Value: PV = FV / (1 + r)ⁿ
  • Future Value (Single Sum): FV = PV × (1 + r)ⁿ
  • Annual Percentage Rate (APR): APR = (1 + r/m)ᵐ – 1 (nominal rate)
  • Effective Annual Rate (EAR): EAR = (1 + r/m)ᵐ – 1
  • Discount Factor: DF = 1 / (1 + r)ⁿ

2. Annuities

  • Present Value of Ordinary Annuity: PV = C × [1 – (1 + r)⁻ⁿ] / r
  • Future Value of Ordinary Annuity: FV = C × [(1 + r)ⁿ – 1] / r
  • Present Value of Annuity Due: PV = C × [1 – (1 + r)⁻ⁿ] / r × (1 + r)
  • Future Value of Annuity Due: FV = C × [(1 + r)ⁿ – 1] / r × (1 + r)

3. Capitalization & Discounting

  • Simple Capitalization: Cₙ = C₀ × (1 + i × n)
  • Compound Capitalization: Cₙ = C₀ × (1 + i)ⁿ
  • Simple Discount: C₀ = Cₙ × (1 – d × n)
  • Compound Discount: C₀ = Cₙ / (1 + d)ⁿ

4. Amortization

  • Monthly Payment (French Loan): M = [P × r × (1 + r)ⁿ] / [(1 + r)ⁿ – 1]
  • Interest Payment: I = Outstanding Balance × r
  • Principal Payment: A = Monthly Payment – Interest Payment

5. Corporate Finance

  • Net Present Value (NPV): NPV = Σ [CFₜ / (1 + r)ᵗ] – Initial Investment
  • Internal Rate of Return (IRR): r where NPV = 0
  • Weighted Average Cost of Capital (WACC): WACC = (E/V) × rₑ + (D/V) × rₐ × (1 – T)
  • Earnings Per Share (EPS): EPS = Net Income / Shares Outstanding

6. Investment & Valuation

  • Dividend Discount Model (DDM): P₀ = D₁ / (r – g)
  • Price-to-Earnings (P/E) Ratio: P/E = Market Price per Share / EPS
  • Capital Asset Pricing Model (CAPM): r = r_f + β × (r_m – r_f)
  • Portfolio Expected Return: E(Rₚ) = Σ wᵢ × E(Rᵢ)
  • Portfolio Variance: σₚ² = Σ Σ wᵢ × wⱼ × Cov(Rᵢ, Rⱼ)

7. Fixed Income

  • Yield to Maturity (YTM): Solve for r in PV = Σ [Cₜ / (1 + r)ᵗ] + F / (1 + r)ⁿ
  • Bond Price: P = Σ [C / (1 + r)ᵗ] + F / (1 + r)ⁿ

8. Derivatives

  • Black-Scholes Option Pricing: C = S × N(d₁) – X × e^(-rT) × N(d₂)
    where d₁ = [ln(S/X) + (r + σ²/2)T] / (σ√T)
    d₂ = d₁ – σ√T

9. Economic Indicators

  • Gross Domestic Product (GDP): GDP = C + I + G + (X – M)
  • Inflation Rate: π = (P₁ – P₀) / P₀ × 100%
  • Unemployment Rate: U = (Number of Unemployed / Labor Force) × 100%

These equations cover core areas of finance and are widely used in personal finance, corporate finance, investment analysis, and economic modeling.

EDUCATION: Books

SPEAKING: Dr. Marcinko will be speaking and lecturing, signing and opining, teaching and preaching, storming and performing at many locations throughout the USA this year! His tour of witty and serious pontifications may be scheduled on a planned or ad-hoc basis; for public or private meetings and gatherings; formally, informally, or over lunch or dinner. All medical societies, financial advisory firms or Broker-Dealers are encouraged to submit an RFP for speaking engagements: CONTACT: Ann Miller RN MHA at MarcinkoAdvisors1738@outlook.com -OR- http://www.MarcinkoAssociates.com

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FINANCE:Financial Planning for Physicians and Advisors

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Dictionary of Health Economics and Finance

Dictionary of Health Information Technology and Security

Dictionary of Health Insurance and Managed Care

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