formula that we will fit everything into
; the one that banks use
to calculate "daily interest" in accounts: A = P(1 +
where the symbols mean
(This top box will more often be set to "Yield".)
That changes to extracting %yr Rate of growth of charts, dividends or earnings.
total amount A
Examples of A:
Right hand price on a chart.
Earnings, Book Value or Number of shares out now.
answer at bottom) is given by
your original P=$10k
Examples: Left hand price on a chart t years wide.
Earnings, Book Value or Number of shares out t years ago.
interest rate of r=7%/yr
Usually this will be chart slope and appear at the top.
The calculator can also get growth rate of interest.
Total return is growth plus yield.
n times per year
"Continuous" means time between calculations goes to zero.
Effectively, that eliminates the variable n completely.
and sitting there
for t years
In this case enter Yield you are testing.
For other examples, set the top box to "Yield",
moving the other entries upward.fifth box
Notice that setting n=a zillion (continuous) eliminates it
and changes the formula to A = Pert.
This formula is used by banks to calculate interest.
To do that it has to be changed to r=Ln(A/P)/t.
Notice that it is not yield.
That happens to be
the formula for the
ert swoops upward on a normal plot.
A "log plot" makes it into a straight line by compressing the upper part of the Y-axis.
"log plots" that
market websites show us.