Independent Variable: Overview, vs. Dependent, Example

By Kristi Waterworth – Updated Nov 3, 2025 at 2:37 PM | Fact-checked by Frank Bass

Key Points

Independent variables in equations let investors explore potential outcomes.
Using independent variables, investors can predict future values like compound interest or P/E ratios.
Understanding the role of independent variables aids in better investment analysis and decision-making.

There's a lot of math that you can do to look at your investments in different ways. Sometimes, the math is really straightforward, but sometimes it's more complex and requires independent variables. Read on to better understand this concept and how to use it in your investing life.

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A hand using a calculator on a desk filled with paperwork. — Image source: Getty Images.

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About the Author

Kristi Waterworth has been a contributing real estate and financial expert at The Motley Fool, covering real estate, investing, and personal finance topics, since 2020. Kristi has been interviewed by various TV media outlets and podcasts for her real estate investing expertise – from residential real estate to digital real estate and everything in between. Kristi’s journalist career spans over 25 years, and she has written about real estate investing, homeownership, and home construction specifically for the last decade. She was also previously a licensed Realtor and general building contractor before the Great Recession and housing market collapse. She holds a bachelor’s degree in American history from Columbia College in Missouri.

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