I have been in Finance profession from last 10 years. Over this period, I have come across lot of people, who end up making wrong financial decision or end up relying on unknown source, mainly due to lack of some basic finance knowledge.

Plethora of information is available on internet - but some of them are way too details and few are oriented towards Finance students.

My intention of this blog is to keep things as simple as it can be and make it like 'Finance for non-finance guys'

Drop in your comments or get in touch over Twitter, if you would like me to cover any specific topics. I will try my best to cover or guide you to the right place.

You can email me as well at finxplain AT gmail.com

### Gold Prices in India

I was working on small project and looking at the data of Gold prices. Here's Google spreadsheet, if anyone wants to play with the data.

Interesting facts - Compounded annual growth rate of Gold from 1947 to 2019 is at 8.5%, that's the compounded return you got for staying invested for 73 years (I am using both 1947 & 2019 as inclusive). I also stumbled upon wonderful analysis done by Jago Investor while looking for data.

Absolute prices does lot of psychological damage to us ;)

### How to calculate EMI in Excel

Continuing with my last post on finding out how much you will make using compound interest, trying to put down the simple method you can use to find out how much Equated Monthly Installment (aka EMI) you need to make for the loan you bought.

Erstwhile, it was predominately for Home loans but now with culture shift and new generation opting for easy loan features for buying the consumption goods (read as high end mobiles, cars etc) - its even more important to know the calculation and find out the real amount you might be paying up.

So let's quickly get into the Excel formula called PMT

=PMT(RATE,NPER,PV,FV,TYPE)

Here,
Rate stands for rate of interest applicable on the loan
NPER stands for total number of monthly installments/ loan tenure
PV stands for present value/ loan amount/ principal amount
FV stands for future value or cash balance once last payment has been made. This can be omitted and the value will be counted as zero (0).

Type is zero (numerical 0) or 1 – this indicates when …

### How to calculate Compound Interest

Everyone agrees magic of compounding and power of compounding. No one needs any explanation on this. So next question comes, how do you compute it and make decision on outcome you are looking at. Bear in mind, I am discussing here from the savings perspective, however, the same holds true for the loan as well.

Going to keep this very simple without going into smaller tiny nitty-gritty. I am assuming you have access to Microsoft Excel (you can use online free version by creating file in OneDrive as well). I am currently using Excel Office 365 version.

There’s an inbuilt function in Excel called FV, which I am going to use.

FV(rate,nper,pmt,[pv],[type])

The FV function syntax has the following arguments:

Rate - The interest rate per period.
Nper - The total number of payment periods in an annuity.
Pmt - The payment made each period; it cannot change over the life of the annuity. Typically, pmt contains principal and interest but no other fees or taxes. If pmt is omitted, you must include t…