Category Other Topics

Hire Purchase Accounting

If you purchase an asset, you have many options as to the payment. One is the cash basis and the other is credit basis. In cash basis, you pay no amount of interest. However, on credit basis, you would be…

Future Value of Annuity

Future Value of Annuity is an important finance topic and getting to know about this will definitely help you out in various finance related problems. As we have already discussed about Annuity in our Present value of Annuity post, we do not…

Present Value of Annuity

Annuity is an extention of the compound interest. In compound interest, we deposit single sum of money and earns the interest. However, in annuity we redeposit the similar sum of money. When we deposit or withdraw an equal sum of…

Compound Interest

Compound interest is simply defined as interest on interest. It is keeps charging interest on the previous period interest amount. So, the amount of principal keeps rising. In the first year, compound interest is equal to compound interest. In later…

Simple Interest

Simple interest is the easiest method of calculating interest on a loan. It calculates interest on a daily basis, that is why, if the borrower pays installment of the loan well before the due date, more of the amount charges…

Present Value of Perpetuity

A perpetuity is a steady stream of cash flows with equal amount  which are paid or received indefinitely. It is a sort of annuity with infinite periods, that is why it is also called perpetual anuity.  Formula Present value of perpetuity =…