Effective 利率 calculation.
The effective period 利率 is equal to the nominal annual 利率 divided by the number of periods per year n:
Effective Period Rate = Nominal Annual Rate / n
求 the effective period 利率 for nominal annual interest rate of 5% compounded monthly
Solution:
Effective Period Rate = 5% / 12months = 0.05 / 12 = 0.4167%
The effective annual 利率 is equal to 1 plus the nominal interest rate in percent divided by the number of compounding persiods per year n, to the power of n, minus 1.
Effective Rate = (1 + Nominal Rate / n)n - 1
求 the effective annual 利率 for nominal annual interest rate of 5% compounded monthly
Solution:
Effective Rate = (1 + 5% / 12)12 - 1
= (1 + 0.05 / 12)12 - 1
= 0.05116 = 5.116%
