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12/n or 365/n

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5208 Points Posted on 12 July 2016
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
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On 12 July 2016 at 22:26 Report
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Chartered Accountant
2229 Points Posted on 12 July 2016
12 represents months in a year and 365 represents days in a year.
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On 12 July 2016 at 22:44
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5208 Points Posted on 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
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On 12 July 2016 at 22:46
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5208 Points Posted on 12 July 2016
why to divide 12/n
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On 12 July 2016 at 22:47
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Chartered Accountant
2229 Points Posted on 12 July 2016
To get annualised return
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On 12 July 2016 at 22:51
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Chartered Accountant
86505 Points Posted on 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.
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On 12 July 2016 at 23:29
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Chartered Accountant
86505 Points Posted on 12 July 2016
Sorry misinterprete the ques. Here n/12 is for getting annual amt .
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On 12 July 2016 at 23:38


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