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How are interest rates calculated?
Calculating Interest: Principal, Rate and Time are Known--I= p r t http://www.calculator.net/interest-rate-calculator.html The level of interest rates in a free market economy are primarily determined by the rate of inflation, the demand for money, and the actions of the Federal Reserve. Lenders of money will generally demand what is known as a nominal interest rate which is equal to a real interest rate plus a premium to cover the inflation rate. The real, or inflation adjusted interest rate, is the percentage rate of return to a lender as measured by an increase in purchasing power. Yale professor Irving Fisher's economic theory of interest rates laid the conceptual groundwork for establishing that the nominal interest rate equals the real interest rate plus the anticipated rate of inflation. Fisher's mathematical equations in his theory of interest rates are supported by empirical data. A comparison of comparable maturity U.S. Treasury securities, one of which has a fixed rate and the other an inflation adjusted rate, shows that the nominal interest rate always exceeds the real interest rate. A consumer, whether a borrower or a saver, will generally be quoted a nominal interest rate by a bank on a loan or a savings account.
What is the formula to calculate monthly interest rate if the annual interest rate is known?
Annual Interest Rate divided by 12= Monthly Interest Rate
What is the Formula for simple interest rate?
The answer for rate in simple interest is =rate= simple interest\principle*time
What is the corresponding componding?
Corresponding compounding is the interest rate on loan or the financial product restated from nominal interest rate as an interest rate with an annual compound interest.
How much interest per month on a 40000 note at 4 percent?
I = prt <-- formula for simple interest, but the rate must be the monthly rate for your problem. Per month means one month (time, t) 4% = 0.04 is an anual interest rate .... monthly rate (r) = 0.04/12 so... I = 40,000 x 0.04/12 x 1 --- multiply and divide to get the answer. Another way: find anual interest, then divide by 12 for monthly interest.
How interest rate affect the sa economy?
how interest rates affect the sa economy
How can interest rate help indicate the health of a countrys economy?
The risk of a nation is based on the interest rate...high rate bad health of country economy, low interest rate better situation
The federal reserve can change the interest rate to help the economy. What is the interest rate?
the cost of borrowing money
The Federal Reserve can change the interest rate to help the economy What is the interest rate?
the cost of borrowing money
What is the significance of interest rate on an economy?
to make the economy more effective and efficient
What has the author Paul D McNelis written?
Paul D. McNelis has written: 'Volatility reversal from interest rates to the real exchange rate' -- subject(s): Interest rates
When a bondholder loses money because interest rates in the economy increase it is an example of what kind of risk?
interest rate
What causes exchange rate volatility?
what are the causes of exchange rate voltaility in pakistan
What special problems does business lending present to the management of a bank?
The major prblems are market volatility, interest rate, regulatory changes, govt. policy, large scale NPAs.
What is evaporation rate of E10 gasoline?
E- 10 has about the same volatility rate as gasoline.
What government loan website offers an interest rate under 6%?
There are lots of government loans, but in this economy it is unfortunately impossible to get a loan with an interest rate of less than 6% from the government.
What is the average fixed interest rate on rent to own homes?
The average fixed interest rate on rent to own homes was around 2.6% at the start of 2013. As with any other kind of loan, this interest rate may vary over time as the economy changes.
