Interest calculator
Calculating interest is simple. However, practice shows that often figures are incorrectly compared and incorrect determinations are made, e.g. proportional increases/decreases, markups are confused with profit margins, etc. Since in practice it is quite common to calculate percentage changes, or the amount of interest in absolute terms, we attach here the most commonly used interest calculators.
The attached interest calculators are designed for different situations in life, but they are not a substitute for mathematical calculations, but can serve to check that the calculations are correct.
Percentage Increase Calculator
When analysing figures, it is often necessary to compare them as a percentage increase or decrease. Then, often, both correct and incorrect formulae were used. The attached percentage increase calculator applies the formula that we believe is most compliant with ACCA standards.
For example, if the first number is 100 and the second 150, the percentage increase is 50% (150/100-1) x 100%.
Simple interest calculator
Standard interest calculator. Useful if you want to determine the value of interest on the principal amount when the interest rate and principal amount are known. If the interest value and the principal amount are known, the calculator also allows you to calculate the interest rate. Before entering the data, you must choose exactly what you want to calculate: the interest rate (%) or the interest value (in monetary units).
Markup/margin calculator
A calculator that can be used in transfer pricing calculations. Interestingly, we have come across transfer pricing specialists who say that mark-up and profit margin are different things. In fact, they are mathematically linked and easily convertible. Good luck!
Discount (rebate) calculator
The calculator calculates the discount rate (EUR to % and vice versa. Useful in case to determine the value of the discount (EUR) if the discount percentage is known or to calculate the discount percentage if the discount value (EUR) is known.
Compound interest calculator
The compound interest calculator or interest calculator calculates the value of an investment by calculating the interest on the principal and the pre-calculated interest.
You may have heard of the compound interest phenomenon? If not, you should know that compound interest is considered a successful investment strategy, i.e. if the returns (interest) from the initial and additional investments are reinvested over a period of time rather than withdrawn, it provides solid growth over the investment period. So if you place funds in, say, a bank deposit and then reinvest the interest earned together with the principal, the annual growth will increase at the expense of the growth in interest earned and the long-term returns will be impressive.
As interest rates on bank deposits are currently close to 0%, the compound interest calculator can be used, for example, to plan investments not only in, say, a bank deposit, but also in other financial instruments. For example, if you invest in shares, making an initial investment and then a monthly investment, you can plan for the potential increase in value. The average annual growth of the stock market (excluding volatility) is believed to be 7%. So by investing in shares and reinvesting the dividends received, the initial investment is considered to double over 10 years (you can check this on the calculator). Good luck!
