Daily rate: Difference between revisions
From ACT Wiki
Jump to navigationJump to search
imported>Doug Williamson m (Added more space so that calculations are clearer) |
imported>Doug Williamson (Align presentation of formula with qualification material) |
||
| Line 2: | Line 2: | ||
For example: | '''For example:''' | ||
if the quoted daily rate is 5.11%, | if the quoted daily rate is 5.11%, | ||
| Line 8: | Line 8: | ||
the amount of interest compounded daily is | the amount of interest compounded daily is | ||
5.11%/365 = 0.014%. | 5.11% / 365 = 0.014%. | ||
Revision as of 15:30, 14 March 2015
The daily rate of interest (or yield) is a quoting convention for the simple interest nominal annual rate for compounding once per day.
For example:
if the quoted daily rate is 5.11%,
the amount of interest compounded daily is
5.11% / 365 = 0.014%.
Not to be confused with the annual effective rate, which in this case would be 1.00014365 - 1 = 5.24%.
