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When the quantity of the output varies from 5 shirts to 10 shirts, fixed cost would be 30 dollars. [1] In this case, the average fixed cost of producing 5 shirts would be 30 dollars divided by 5 shirts, which is 6 dollars. In other words, when 5 shirts are produced, 30 dollars of fixed cost would spread and result in 6 dollars per shirt.
In 1863, English economist William Stanley Jevons proposed taking the geometric average of the price relative of period t and base period 0. [5] When used as an elementary aggregate, the Jevons index is considered a constant elasticity of substitution index since it allows for product substitution between time periods.
The present value formula is the core formula for the time value of money; each of the other formulas is derived from this formula. For example, the annuity formula is the sum of a series of present value calculations. The present value (PV) formula has four variables, each of which can be solved for by numerical methods:
The formula calculator concept can be applied to all types of calculator, including arithmetic, scientific, statistics, financial and conversion calculators. The calculation can be typed or pasted into an edit box of: A software package that runs on a computer, for example as a dialog box. An on-line formula calculator hosted on a web site.
Equivalently C is the periodic loan repayment for a loan of PV extending over n periods at interest rate, i. The formula is valid (for positive n, i) for ni≤3. For completeness, for ni≥3 the approximation is . The formula can, under some circumstances, reduce the calculation to one of mental arithmetic alone.
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For example, for a home loan of $200,000 with a fixed yearly interest rate of 6.5% for 30 years, the principal is =, the monthly interest rate is = /, the number of monthly payments is = =, the fixed monthly payment equals $1,264.14. This formula is provided using the financial function PMT in a spreadsheet such as Excel. In the example, the ...
The simplest example given by Thimbleby of a possible problem when using an immediate-execution calculator is 4 × (−5). As a written formula the value of this is −20 because the minus sign is intended to indicate a negative number, rather than a subtraction, and this is the way that it would be interpreted by a formula calculator.