Periodic interest and Periodic yield: Difference between pages

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1. The interest - in money terms - for any given period under review.
A rate of return - or cost of borrowing - expressed as the proportion by which the amount at the end of the period exceeds the amount at the start.  
For example £140 per day.


2. The periodic rate of interest.


== See also ==
==Example 1==
* [[Periodic rate of interest]]
GBP 1 million is borrowed or invested.


GBP 1.03 million is repayable at the end of the period.
The periodic yield (r) is:
(End amount / start amount) - 1
= (1.03 / 1) - 1
= 0.03
= 3%
==Example 2==
GBP  0.97 million is borrowed.
GBP 1.00 million is repayable at the end of the period.
The periodic yield (r) is:
(End amount / start amount) - 1
= (1.00 / 0.97) - 1
= 0.030928
= 3.0928%
==See also==
*[[Annual effective rate]]
*[[Discount rate]]
*[[Periodic discount rate]]
*[[Yield]]

Revision as of 10:57, 25 October 2015

A rate of return - or cost of borrowing - expressed as the proportion by which the amount at the end of the period exceeds the amount at the start.


Example 1

GBP 1 million is borrowed or invested.

GBP 1.03 million is repayable at the end of the period.


The periodic yield (r) is:

(End amount / start amount) - 1

= (1.03 / 1) - 1

= 0.03

= 3%


Example 2

GBP 0.97 million is borrowed.

GBP 1.00 million is repayable at the end of the period.


The periodic yield (r) is:

(End amount / start amount) - 1

= (1.00 / 0.97) - 1

= 0.030928

= 3.0928%


See also