INTEREST RATE (%) ANA BEATRIZ JIMENEZ GIL
Get Started. It's Free INTEREST RATE (%) 1. Money price in time

1.1. Variable affecting you

1.1.1. Inflation

1.1.2. Devaluation

1.1.3. Offer and Demand

2. Effective Rate (E)

2.1. Annually effective rate (EA)

2.1.1. Expired (iPv)

2.1.2. EA=(1+iPv)^n

2.1.2.1. iPv=(1+EA)^(1/n)-1

2.1.2.2. iPv=iN/n

2.2. Periodic effective rate

2.2.1. Expired (iPV)

2.2.3. Periods

2.2.3.1. Monthly iPM

2.2.3.2. Bimonthly iPB

2.2.3.3. Quarterly iPT

2.2.3.4. Biannualy iPS

2.2.3.5. Diary iPD

2.2.4. Relationship

2.2.4.1. They don't split, it doesn't multiply by the number of periods.

3. Nominal Rate (N)

3.4. Relationship between nominal rate and periodic rate

3.4.1. N=Annual rate/Periods

3.4.2. iP= (Periods Stipulated in the Nominal Rate)* (Periodid Rate)

3.5. Difference between nominal and effective rate

3.5.1. The nominal rate is the profitability generated period by period (simple interest)

3.5.2. The effective rate is the profitability obtained both on the investment and on the interests of each period (compound interest)