That depends on what you DO know. You might consider asking again, being more specific about what information you have. For example, if you know the amount of interest, the principal, and the length of time, you can readily calculate the effective interest rate even if you don't know the nominal value or how often it's compounded.
To calculate CD interest rate, all you have to do is to just multiply the principal amount you have invested in CD with interest rate. If u want to calculate for the monthly interest then divide the resultant with 12.
Annual Interest Rate divided by 12= Monthly Interest Rate
That's an effective annual rate of 15.39%, thanks to the magic of compound interest (simple multiplication gives 14.4%, but this neglects the fact that if you don't pay it off each month you wind up paying interest on interest).
14.4 %. A+
We still need to know how often the interest is compounded ... Weekly ? Daily ? Hourly ? What does "continuous" mean ?
how is line of credit interest calculated
Effective cost of funding=[(1+foreign interest rate)(1+forward premium)]-1
An effective annual interest rate considers compounding. When the principle is compounded multiple times each year the interest rate increased to be more than the stated interest rate. The increased interest rate is the effective annual interest rate.
2(3)(10)/4 = 15%
A stated interest rate is the rate that is available when you are applying. An effective interest rate is the rate that has been applied to the loan. The true cost of borrowing is the effective interest rate.
Effective cost of funding=[(1+foreign interest rate)(1+forward premium)]-1
To calculate CD interest rate, all you have to do is to just multiply the principal amount you have invested in CD with interest rate. If u want to calculate for the monthly interest then divide the resultant with 12.
Annual Interest Rate divided by 12= Monthly Interest Rate
That's an effective annual rate of 15.39%, thanks to the magic of compound interest (simple multiplication gives 14.4%, but this neglects the fact that if you don't pay it off each month you wind up paying interest on interest).
Nominal InterestA nominal interest rate is the interest rate that does not compensate for inflation. This is used in relation to "effective interest rate" or "real interest rate."" Real Interest Rate = Nominal Interest Rate - Inflation Rate " Improvement suggested by Palash Bagchi.
14.4 %. A+
The new interest rate due to the impact of the total fees is 13.233 % which translates into an effective interest rate of 13.6708 % due to semi-annual compounding.