Formulas

Question 1

Capital Needs Analysis

Answer 1

Annual Amount Needed / Nominal Rate

Question 2

Yield to Maturity

Answer 2

TVM using the following

N - Years to Maturity x 2
I - Solve
PV - current value
PMT - annual interest payment
FV - Par Value

Question 3

Average Tax Rate

Answer 3

Total Taxes Paid / Taxable Income

Question 4

Annuity Exclusion Ratio Formula

Answer 4

Cost Basis / Total Expected Income

This is used to determine the taxable part of an annuity payment

Question 5

Dollar Weighted Return

Answer 5

CF Function on Calculation

Question 6

Time Weighted Return

Answer 6

B - A / B

Ending - Beginning / Ending

Question 7

College Funding: Lump Sum Needed Today

Answer 7

1. Calculate the Future Cost of Year 1 (TVM)
2. Calculate the Lump Sum Needed at Age 18 (TVM)
3. Calculate the Present Value Today (TVM)