Allows you to simplify the comparison of profitability for annual compound interest with different income accrual intervals (when interest is accrued several times a year at the annual compound interest rate)
The debt to income ratio is used in lending to calculate an applicant's ability to meet the payments on the new loan.
Used to calculate how long it would take to double the balance on an interesting bearing account that has simple interest.
The loan to deposit ratio is used to calculate a lending institutions ability to cover withdrawals made by its customers
The formula for the loan to value ratio is most commonly referenced in auto loans and mortgages, but can be applied to any loan that is secured with collateral including boat loans, RV loans, and certain types of commercial loans.