While solving sum in finance where period or date is involved why we divide anything by 12/n or 365/n?What it represents? Please explain with logic
for eg: Return on Mutual fund=
NAV @ end-NAV @ beg + dividend/NAV @ beg *12/n*100
6 Replies
CA Harshal Totla
(Chartered Accountant)
(2229 Points)
Replied 12 July 2016
12 represents months in a year and 365 represents days in a year.
Shobhit Jain
(CA)
(4896 Points)
Replied 12 July 2016
That I know but usually we divide n/12 for instance in order to find discount for a particular period but why to divide n/12
CA Rashmi Gandhi
(Chartered Accountant)
(86323 Points)
Replied 12 July 2016
Generally rate of interest is per annum that is for full year. We dividd the amt from 12 to get monthly interest.n here refers to no. of months. By multiplying the monthly amt with n , we get the amt for the period of investment.
CA Rashmi Gandhi
(Chartered Accountant)
(86323 Points)
Replied 12 July 2016
Sorry misinterprete the ques. Here n/12 is for getting annual amt .
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