1. PERCENTAGE. Calculating the percent of a quantity A means finding a quantity B such that A and B are in the same proportion as 100 and t.
2. SIMPLE INTEREST. It consists of calculating interest on a fixed amount determined at the source. Interest is NOT capitalized.
3. COMPOUND INTEREST. It consists of calculating interest on a certain amount by the amount accumulated until the previous period. Interest is capitalized.
4. FRENCH AMORTIZATION SYSTEM. The objective is to analyze not only the value of the fees, but also their composition, which varies from one period to another. Each installment is made up of a capital part and an interest part. In this system, the total value of the installment remains constant, but the interest decreases as the capital increases. Excel functions can be used for its calculation.
5. GERMAN AMORTIZATION SYSTEM. The objective is to analyze not only the value of the fees, but also their composition, which varies from one period to another. Each installment is made up of a capital part and an interest part. In this system, the total value of the installment decreases over time, the capital component remains constant but the interest decreases. You can NOT use Excel functions for its calculation, you must necessarily use formulas.
6. INDICES Among the different types of indices, we are going to focus the analysis on two of them: a. Price indices b. Interest rate indices.
to. Price indices These indices are generally provided by government institutions, such as INDEC (National Institute of Statistics and Censuses). With regard to them, lately a concern has been generated among people: do the price indices reflect the true variation that is observed in prices? The reason for this question is very simple: the indices denote small price increases, while in the supermarket shelves the observed increases are several times higher.
b. Interest rate indices. These are indices that are generated from an interest rate; They are intended to simplify the calculation of interest, especially when the interest rate has many variations.
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As a complement, we suggest the following video-course (13 videos, 9 hours), taught by Professor José Manuel Brotons of the Miguel Hernández University of Elche, through which you will be able to appreciate first-hand how to apply the spreadsheet in the solution of financial math problems.
