Finance Formulas & Reference
The maths behind every Tool Corner finance calculator — interest, loan and mortgage repayments, VAT, markup, savings and UK tax — with each variable spelled out. Use it as a quick check, then jump straight to the tool that does the working for you.
Interest & growth
Compound interest
final balance · £- A — the final balance
- P — starting principal
- r — annual rate (as a decimal)
- n — compounds per year
- t — years invested
Simple interest
interest · £- I — interest earned or charged
- P — principal
- r — annual rate (decimal)
- t — time in years
Future value of regular savings
pot value · £- FV — value of the pot at the end
- PMT — amount saved each period
- r — rate per period (decimal)
- n — number of payments
Annualised return (CAGR)
growth · % / yr- Vend — ending value
- Vstart — starting value
- t — number of years
Inflation-adjusted value
real value · £- Real — value in today’s money
- Nominal — future cash amount
- i — annual inflation rate (decimal)
- n — number of years
Borrowing
Loan & mortgage payment
per month · £- M — fixed payment each period
- P — amount borrowed
- r — interest rate per period (decimal)
- n — total number of payments
Total interest paid
over the term · £- M — payment each period
- n — number of payments
- P — amount borrowed
Pricing & business
VAT
gross & tax · £- Net — price before tax
- v — VAT rate (decimal, e.g. 0.20)
- Gross — price including VAT
Markup
selling price · £- Cost — what the item cost you
- m — markup (decimal, e.g. 0.40)
- Price — selling price
Profit margin
margin · %- Price — selling price
- Cost — cost of the item
- Margin — share of the price that is profit
Tax & take-home pay
Income tax (banded)
tax due · £- band — each slice of income (e.g. basic, higher)
- band rate — the % charged on that slice
- Tax — sum across every band
Take-home pay
net · £- Gross — salary before deductions
- Income Tax — tax across the bands
- NI — National Insurance
- Net — what lands in your account
Key terms at a glance
Tip: convert a percentage to a decimal before using it in a formula — divide by 100. For monthly loan or savings maths, also divide the annual rate by 12 and count periods in months.
How to use this page
Pick the formula that matches your question, then open the calculator beside it to run the numbers. Every tool on the finance hub uses the exact formula shown here and lays out its working, so you can follow the method rather than trust a black box. Rates go in as decimals, and monthly maths uses a monthly rate (annual ÷ 12).
Sources & references
Rates and definitions on this page follow the official UK guidance published by:
- GOV.UK (HMRC) — Income Tax bands, National Insurance and VAT rates
- Bank of England — the Bank Rate and UK inflation data
- Financial Conduct Authority — how APR and AER must be quoted to consumers
- Investopedia — standard definitions of the compound-interest, annuity and CAGR formulas
Tax and VAT rates change each tax year — always confirm the current figures on GOV.UK before relying on a result.
Cite this page
You are welcome to quote these formulas and figures in a lesson, a forum answer, a wiki or a write-up. A link back is all we ask — it lets your reader check the figure against its source, which is the point of the page.
Tool Corner, “Finance Formulas & Reference”. Updated 29 July 2026. https://toolcorner.net/finance-formulas.html
Every formula is stated with its symbols and its sources are linked wherever a stable public page exists, so a citation here can be traced rather than taken on trust.