# The Formulas You Need to Know

## Symbols Used

$BAL$ = principal balance immediately after an annuity payment

$BAL_{P1}$ = principal balance immediately prior to the first payment in a series of annuity payments

$BAL_{P2}$ = principal balance immediately after the last payment in a series of annuity payments

$C/Y$ = compounding frequency

$i$ = periodic interest rate

$INT$ = interest portion of an ordinary single annuity payment or a series of annuity payments

$n$ = number of annuity payments (for annuities) or number of compounding periods (for lump sums)

$PMT$ = annuity payment amount

$PRN$ = principal portion of a single annuity payment or a series of annuity payments

$P/Y$ = payment frequency

## Formulas Introduced

Interest Portion of an Ordinary Single Payment:

$INT=BAL \times i$

Principal Portion of a Single Payment:



$PRN=PMT-INT$

Principal Portion for a Series of Payments:

$PRN=BAL_{P1}-BAL_{P2}$

Interest Portion for a Series of Payments:

$INT=N \times PMT - PRN$