What is finance?
Finance is the management of money and other liquid recourses that can be easily converted into cash. It is the procurement of funds and effective use of funds. It includes the oversight of banking, investment, creation and study of money, credit, assets, and liabilities.
Features of finance:
- Investment opportunities: Creating physical assets with the money, carrying on business activities and acquiring financial securities.
- Profitable opportunities: utilization of resources most efficiently. Gains long-term results.
- Optimal mix of funds: owned funds and borrowed funds.
- System of internal controls: Internal controls are a set of rules and regulations framed for the organization.
- Future decision-making: A good finance is an indication of growth and good returns. Taking the right decision creates more profits.
Types of finances:
- Public finance: To prevent market failure the government has to take a step to help the public by allocating resources, distribution of income and the stabilization of the economy. It usually a long-term strategy regarding the investment decision that affects public entities. It is primarily concerned with the identification of expenditure requirement of public entities, sources of the entity’s revenue, the budgeting process and debt issuances.
- Corporate finance: A firm obtaining finance through a variety of sources, ranging from equity investments to credit arrangements. Managing debt properly can help a company expand and become more profitable. It deals with the sources of funding and the capital structure of the organization.
- Personal finance: Personal finance is the financial planning that an individual or a family financial structure like budget, save and spend resources over a time period by considering the various financial risks and future events. The most important key point of the personal finance is assessing the current financial status, buying insurance, calculating and filing taxes, saving and investments and retirement planning.
The components included in the finance calculator:
- Time period: For the number of years the amount is financed.
- Start principal: The principal borrowed or the amount financed.
- Interest: The rate of interest paying on the amount financed.
- PMT (annuity payment): The inflow or outflow of the amount at the beginning or end of the compounding period.
- Future value: The future value of the amount financed.
Using this finance calculator you can calculate the future value, the number of compounding periods, interest rate, annuity payment and start principal of amount financed.