The annual effective discount rate expresses the amount of interest paid or earned as a percentage of the balance at the end of the annual period. It is related to but slightly smaller than the effective rate of interest, which expresses the amount of interest as a percentage of the balance at the start of the period. The discount rate is commonly used for U.S. Treasury bills and similar financial instruments. For example, consider a government bond that sells for $95 ('balance' in the bond at the start of period) and pays $100 ('balance' in the bond at the end of period) in a year's time. The discount rate is The effective interest rate is calculated using 95 as the base which says that of $105.26 is $100. For every effective interest rate , there is a corresponding effective discount rate that can produce the same future value as if a given amount of principal is invested for the same amount of time at each of the rates and , and they are said to be equivalent. Therefore, we have the following relationship between two equivalent rates and . Using this, we can derive the following expression of and . , and We usually define as the discount factor which is given by , then we can derive that, and using the above relationships between and . (Wikipedia).
Annual Percentage Rate (APR) and Effective APR
The difference between APR and effective APR
From playlist Finance
Effective Interest Rate (Effective Yield)
This video shows how to derive the effective interest rate formula for compounded and continuous interest. It also provides two examples on how to calculate effective interest rate. Site: http://mathispower4u.com Search: http://mathispower4u.wordpress.com
From playlist Finance: Simple and Compounded Interest
From playlist MATH 1324: Finite Mathematics
Business Math - Finance Math (8 of 30) Effective Rate of Interest
Visit http://ilectureonline.com for more math and science lectures! In this video I will explain and find the effective rate of interest of an $1000 investment at 5% for 1 year compounded monthly and daily. Next video in this series can be seen at: http://youtu.be/lu5EQs8jVl8
From playlist BUSINESS MATH 2 FINANCE MATH
Annual Percentage Rate vs Annual Percentage Yield
This video explains how to determine the annual percentage rate (APR) charged by a payday loan company and how to calculate the annual percentage yield charged by a credit card company. Investing In Bonds: https://www.youtube.com/watch?v=OnkmoSTeHuc The Dividend Yield: https://www.youtub
From playlist Personal Finance
Effective Yield for Countinuous Interest
This video derives the effective yield formula and shows how to determine effective yield using the formula. http://mathispower4u.com
From playlist Finance: Simple and Compounded Interest
Determining the Effective Yield of an Investment on the TI84
This video shows how to determine the effective yield of an investment account on the TI84. http://mathispower4u.wordpress.com/
From playlist TI-84: Financial Mathematics
Effective Yield for Compounded Interest
This video derives the effective yield formula and shows how to determine effective yield using the formula. http://mathispower4u.com
From playlist Finance: Simple and Compounded Interest
From playlist Personal Finance
Level 1 Chartered Financial Analyst (CFA ®): Time value of Money (TVM), Part 1
Session 2, Reading 6 (Part 1): An interest rate can be a required rate of return (aka, hurdle rate), a discount rate, and/or an opportunity cost. We can deconstruct an interest into its components where the rate, r = real risk-free interest rate + inflation premium + default risk premium +
From playlist Level 1 Chartered Financial Analyst (CFA ®) Volume 1
Interest rates: compound frequencies (FRM T3-8)
[here is my xls https://trtl.bz/2pLNBTV] The full specification of a rate is something like "discount at 8.0% per annum with annual compounding" or "compound at 8.0% per annum with continuous compounding). Discuss this video in our FRM forum: https://trtl.bz/2HnN0kN.
From playlist Financial Markets and Products: Intro to Derivatives (FRM Topic 3, Hull Ch 1-7)
Ses 3: Present Value Relations II
MIT 15.401 Finance Theory I, Fall 2008 View the complete course: http://ocw.mit.edu/15-401F08 Instructor: Andrew Lo License: Creative Commons BY-NC-SA More information at http://ocw.mit.edu/terms More courses at http://ocw.mit.edu
From playlist MIT 15.401 Finance Theory I, Fall 2008
Excel Finance Class 48: Calculate YTM and Effective Annual Yield From Bond Cash Flows RATE & EFFECT
Download First Excel File: https://people.highline.edu/mgirvin/YouTubeExcelIsFun/Busn233Ch06.xls Download Second Excel File: https://people.highline.edu/mgirvin/YouTubeExcelIsFun/Busn233Ch06-SecondFile.xls Download Third Excel File: https://people.highline.edu/mgirvin/YouTubeExcelIsFun/Bus
From playlist Excel Finance Free Course at YouTube. Cash Flow Analysis and Model Building (110 Videos).
Level 1 Chartered Financial Analyst (CFA ®): Money Market Yields
In this video, we look at the different measures of money market yield. When we say money market, we distinguish between money market and capital market where the big difference is time. 💡 Discuss this video here in our forum: https://trtl.bz/2yuhGvs 👉 Subscribe here https://www.youtube
From playlist Level 1 Chartered Financial Analyst (CFA ®) Volume 1
Why par yields are the best interest rate measure
Par yields are the best interest rate because they summarize the spot rate term structure into a single yield measure. I also show the so-called "coupon effect" which is also an argument in favor of par yields. But I think the better reason is their information content. Yield to maturity (
From playlist FRM applications
Yield to Maturity Interpretations (FRM T3-10)
[my xls is here https://trtl.bz/2HifflO] Superficially, the yield to maturity (YTM, aka yield) simply inverts the usual time value of money (TVM) inputs by solving for the yield as a function of four inputs: face (future) value, coupon (payment), maturity (time), and current price (present
From playlist Financial Markets and Products: Intro to Derivatives (FRM Topic 3, Hull Ch 1-7)
2 1 Pricing deterministic payoffs Part 1
BEM1105x Course Playlist - https://www.youtube.com/playlist?list=PL8_xPU5epJdfCxbRzxuchTfgOH1I2Ibht Produced in association with Caltech Academic Media Technologies. ©2020 California Institute of Technology
From playlist BEM1105x Course - Prof. Jakša Cvitanić
Convexity and risk premium impacts on shape of term structure (FRM T5-08)
In this video, I'm going to try to illustrate all of the important ideas that are in Tuckman's Chapter 8: The Evolution of Short Rates and the Shape of the Term Structure. This chapter discusses the shape of the term structure and the key influences on the shape of the spot rate term struc
From playlist Market Risk (FRM Topic 5)
Intro to Investing In Bonds - Current Yield, Yield to Maturity, Bond Prices & Interest Rates
This video provides a basic introduction into investing in bonds. It explains how to calculate the total price paid for a number of bonds, how to calculate the semi-annual coupon payments of a bond, and how to calculate the current yield of a bond as well as estimate the yield to maturity
From playlist Stocks and Bonds
Excel Finance Class 28: Relationship Between APR, Period Rate and Effective Annual Rate
Download Excel File: https://people.highline.edu/mgirvin/YouTubeExcelIsFun/Busn233Ch05.xlsx Download pdf notes: https://people.highline.edu/mgirvin/YouTubeExcelIsFun/Ch05Busn233.pdf Download deductive proof pdf: https://people.highline.edu/mgirvin/YouTubeExcelIsFun/DeductiveProofAnnuityFor
From playlist Excel Finance Free Course at YouTube. Cash Flow Analysis and Model Building (110 Videos).