Finance interest: Difference between revisions
From wikinotes
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== Real Interest Rate == | == Real Interest Rate == | ||
<blockquote> | <blockquote> | ||
Nominal interest rate, with the inflation | Nominal interest rate, with the inflation-rate removed.<br> | ||
Emphasizes value at end of period. | |||
<math> | <math> | ||
Revision as of 02:32, 2 November 2021
Overview
TODO:
how are interest rates set?
Terminology
yield: return: nominal: real: effective:
Rate Types
Nominal Interest Rate
nominal_rate = 5% 5$ interest for each 100$
- Does not account for inflation
Real Interest Rate
Nominal interest rate, with the inflation-rate removed.
Emphasizes value at end of period.
Effective Interest Rate
Annual Interest Rate
