Business Math - Finance Math (8 of 30) Effective Rate of Interest
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- Опубликовано: 7 мар 2015
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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:
• Business Math - Financ...
Man, I have no words to explain how grateful i am for this channel. I don't know where I would be if it wasn't for your physics, electrical engineering and now finance videos. Thank You very much!
Amazing video, best one youtube!! Thank you so much for your examples and follow-along calculations!
It would be nice if you did a series of videos showing the derivation of these interest formulas.
amazing video, very helpful
Thank you very much.
I really enjoyed the lesson!!!
Thank you. I am from Bangladesh. Your videos are saving me from boring online lectures in this tough corona time.
Thanks for sharing and welcome to the channel!
U made is really easy to understand. Thank u.
Thank you for posting finance tutorials! Taking summer classes and have no help understanding intro to finance. Very helpful!
Really greatful..good work😉
I have learnt so much from you, sir. Thank you much!
We appreciate your comment.
Yooo he saved my physics grades, he saved my engineering grade, now this G is about to save my Econ grade. What a man lol.
Nice to understand the topic
very well explained. ..
you are amazing,.,.,.
God bless you sir.
awesome...
Thanks!
Well said thank you.
Thank you sir
Great video, really easy to understand!
nicelecturesir,itwill be helpful for understand this concept
Glad you found us.
What calculator would you recommend for a grad school management course? Thanks for your help.
Calculators are a very personal thing and everyone seems to like theirs for one reason or another. I use an $8 calculator that has gotten me through almost everything, but most would probably like a more advanced calculator for business math.
This was very helpful..
Thank you 🎉
You are welcome. 🙂
*Many thanks for the reply Sir.*
Thank you so much, sir.
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Hi, for an example if PV =410.71, FV=1817.91, NUMBER OF PERIODS =17, HOW CAN I FIND THE INTEREST RATE ON A TI83PLUS CALCULATOR? Thanks
We have a few videos on this topic starting with this one; Business Math - Finance Math (10 of 30) Future Value of an Annuity (End of Pay Period) ruclips.net/video/ADpfhW2K39o/видео.html Any calculator will work.
in case of an investment of several years we have the parentesis to the power of mt. is it correct?
The effective rate of interest is usually calculated for 1 year.
your so awesome sir. thank you
You are very welcome
Thank you very much
Glad you found it helpful. 🙂
Very helpful
Glad to hear that
Thank you
You're welcome
Sir, please add the t term to your effective equation to make it general and not just 1 yearly.
Or we should renamed everything to EFFECTIVE ANNUAL INTEREST RATE
*Clearly explained Sir, but can you please tell me why is it necessary to calculate/know the effective rate, because to me, it seems to serve no real purpose. Thank you.*
It gives us a way to compare. What would the simple interest rate have to be in order to earn the same amount?
APR is put into you're compound formula and your effective rate is used in your simple interest formula both will give the same results
Great sir I am from india
A long way from here. Welcome to the channel.
so u multiply the exponent times what you get in the parenthesis. Im confused
First you calculate 1+ (r/m) then you take that result and raise it to the m power.
Someone please help. I just tried the first one and compared it to a simple interest and I keep getting 2306.97 (Simple) and 2322.94 (Compound), even tho I am using the 5.116% on the simple. What am I doing wrong?
It looks like you are doing it correctly. You will earn more interest if you use compounding rather than simple interest.
@@MichelvanBiezen Hey, I just found my mistake, I was adding the three year period to one, but not the other. Othet than that it worked perfectly, thank you so much for the lessons, it helps a ton. :)
i interest thank you
Glad you found it interesting. 🙂
So how would you calculate it if it's compounded every term
We are not sure what you mean by "every term". Compounding can be done year, quarterly, monthly, bi-weekly, weekly, daily, hourly, etc.
@@MichelvanBiezen so it can't be compounded continuously?
Yes, it can. There is a video explaining that. (It becomes an exponential function).
Can someone answer my question?
If you have a higher interest rate and is compounded monthly or daily, do you earn more money in the bank?
I'm sorry it's just that I'm confused.....
At the same interest rate, daily compounding will earn you more money than monthly compounding. (All banks now do daily compounding)
Thank you
I love Finance so much, but I'm so bad at math. Everything pushes me to human resources, but I want this terrible-however, I'm a single dad.
If you take it one video at a time, and spend enough time at it until you understand it, does that work for you. Often it is just a matter of spending enough time at it in order to understand it. Also, it may be that you need to review your algebra. (We have a complete set of playlists covering all of algebra) and it may be helpful to review some ot those key topics.
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Very useful !