HJ_L02 - Structure Interest Rates Single Payments Multiple...

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. . . . . . Structure Interest Rates Single Payments Multiple Payments FINS 5514 Lecture 02 Mark Humphery-Jenner Mark Humphery-Jenner FINS 5514 Lecture 02
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. . . . . . Structure Interest Rates Single Payments Multiple Payments Structure I Structure Interest Rates Single Payments Multiple Payments Equal Payments Growing Payments Continuous Payments Mark Humphery-Jenner FINS 5514 Lecture 02
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. . . . . . Structure Interest Rates Single Payments Multiple Payments Interest Rates I Types of interest rate: I Nominal I Periodic I Annual Effective I Continuous Mark Humphery-Jenner FINS 5514 Lecture 02
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. . . . . . Structure Interest Rates Single Payments Multiple Payments Converting Nominal to Annual Effective I 1 + i aer = ( 1 + i nom m ) m (1) Where, i nom = Nominal rate i aer = Annual effective rate m = Number of periods Mark Humphery-Jenner FINS 5514 Lecture 02
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. . . . . . Structure Interest Rates Single Payments Multiple Payments Converting Continuous to Annual Effective I I An expression for the amount of interest earned on at a
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HJ_L02 - Structure Interest Rates Single Payments Multiple...

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