Interest Rate Calculations 101 (You need to remember these calculations! )
Understanding the Basics of Interest Rates 101, CFA 101 with Diagrams Simple or Compound interest rate. This is basic calculation methods for interest. Everything is the interest.
Welcome to "Interest Rate Calculations 101!" In this introductory guide, we will delve into the fascinating world of interest rates and explore how they are calculated. Whether you're a finance enthusiast, a student studying economics, or simply someone curious about the workings of interest rates, this guide will provide you with a solid foundation. We will cover the basics, such as the different types of interest rates and how they impact borrowing and saving. So, buckle up and get ready to unravel the mysteries behind interest rate calculations!
How do you calculate simple interest annually?
Money : 100 $, Interest = 5% and Maturity= 2 years
Annual Simple Interest = Money * Interest * Maturity
Annual Simple Interest = 100 * (5/100) *2
Annual Simple Interest =10 $
How do you calculate simple interest monthly?
Money : 100 $, Interest = 5% and Maturity= 2 months
Annual Simple Interest = Money * Interest * Maturity
Annual Simple Interest = 100 * (5/100) *(2/12)
Annual Simple Interest =0.83 $
How do you calculate simple interest daily?
Money : 100 $, Interest = 5% and Maturity= 20 days
Annual Simple Interest = Money * Interest * Maturity
Annual Simple Interest = 100 * (5/100) *(20/360)
Annual Simple Interest =0.27 $
How do you calculate compound interest annually?
Money : 100 $, Interest = 5% and Maturity= 2 years
Compound Simple Interest = Money * [ (1+Interest) ^ Maturity ] - Money
Compound Simple Interest = 100 * [ (1+5/100) ^2 ] -100
Compound Simple Interest =10.25 $
How do you calculate compound interest monthly?
Money : 100 $, Interest = 5% , Maturity= 2 years and Period=3 (This means that the interest is paid in every quarter. We put 4)
Compound Monthly Interest = Money * [ (1+Interest/Period) ^ (Maturity*Period) ] - Money
Compound Monthly Interest = 100 * [ (1+(5/100/(4)) ^(2*4) ] -100
Compound Monthly Interest =10.44 $
How do you calculate compound interest daily?
Money : 100 $, Interest = 5% , Maturity= 2 years and Period=10 (This means that the interest is paid in every 36 days. We put 36)
Compound Monthly Interest = Money * [ (1+Interest/Period) ^ (Maturity*Period) ] - Money
Compound Monthly Interest = 100 * [ (1+(5/100/(36)) ^(2*36) ] -100
Compound Monthly Interest =10.51 $
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