When do you use finance solver?

[chocobun]

Can you use it for any question in Core (2)? I'm a bit confused about annuities and perpetuities too.

[Kimahso]

What do you mean by Core (2)? If you're talking about the Recursion and Financial Modelling Section of Core then yes, you use Financial Solver for most of the questions. The formula for perpetuity is d=Vr/100 where d is the amount paid, V is the principal amount and r is the percentage per period. The principal always stays the same in a perpetuity. For annuities you just use Financial Solver and calculate normally I think.

[clarke54321]

Can you use it for any question in Core (2)? I'm a bit confused about annuities and perpetuities too.

Hi there,

An annuity is an investment in which you receive an equal amount of money from on a regular basis, such as a month, or quarter. It uses the same model as a reducing balance loan but it represents how much is left at a given time, not owed.

A perpetuity is a form of annuity. However the payment you receive each time is the interest earnt. Therefore, the principal remains the same indefinitely.

Basically for any type of annuity or a loan where compound interest is applied, the financial solver can be used!