Pensions and Lifetime Savings Association and Periodic discount rate: Difference between pages
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A rate of return - or cost of borrowing - expressed as: | |||
*The excess of the amount at the end over the amount at the start | |||
*Divided by the amount at the end | |||
==Example 1== | |||
GBP 1 million is borrowed. | |||
GBP 1.03 million is repayable at the end of the period. | |||
The periodic discount rate (d) is: | |||
(End amount - start amount) / End amount | |||
= (1.03 - 1) - 1.03 | |||
= 0.029126 | |||
= 2.9126% | |||
==See also== | ==See also== | ||
* [[ | |||
* [[ | *[[Annual effective rate]] | ||
* [[ | *[[Discount rate]] | ||
* [[ | *[[Periodic yield]] | ||
*[[Yield]] |
Revision as of 10:44, 25 October 2015
A rate of return - or cost of borrowing - expressed as:
- The excess of the amount at the end over the amount at the start
- Divided by the amount at the end
Example 1
GBP 1 million is borrowed.
GBP 1.03 million is repayable at the end of the period.
The periodic discount rate (d) is:
(End amount - start amount) / End amount
= (1.03 - 1) - 1.03
= 0.029126
= 2.9126%