- compare auto insurance rates
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How come ALL THE FOUR of those rates are "equivalent" ???
10% per year.
Effective 10.25% per year, compounded semi-annually.
5% per year, compounded semi-annually.
Nominal 4.88% per year, compounded semi-annually.
The formula to convert from nominal to effective is:
=(1+(/))^−1
backward:
(/)=(1+)^(1/)−1
I am so confused, can anyone please give me some directions? A website, a blog, software application, or even an article or a book.
Any help is appreciated. Thanks!
Additional Details I think i used the backward formula in the wrong way.
10% nominal per year, is equivalent to
5% nominal per half year (per compounding period), which is equivalent to
(1 5%)^2 -1=10.25% effective PER YEAR, compounded semiannually.
Backward Formula; effective to nominal ((i.e. nominal per compounding period))
(1 10.25%)^(1/2) -1= 5% nominal per half year.
10% per year.
Effective 10.25% per year, compounded semi-annually.
5% per year, compounded semi-annually.
Nominal 4.88% per year, compounded semi-annually.
The formula to convert from nominal to effective is:
=(1+(/))^−1
backward:
(/)=(1+)^(1/)−1
I am so confused, can anyone please give me some directions? A website, a blog, software application, or even an article or a book.
Any help is appreciated. Thanks!
10% nominal per year, is equivalent to
5% nominal per half year (per compounding period), which is equivalent to
(1 5%)^2 -1=10.25% effective PER YEAR, compounded semiannually.
Backward Formula; effective to nominal ((i.e. nominal per compounding period))
(1 10.25%)^(1/2) -1= 5% nominal per half year.
What's the difference between APY, API and other ratios?
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