Scribd Logo
Upload

Welcome to Scribd!

  • 23 Effective Rate of Interest Calculations

    Uploaded by

    sreekanthsubbarao
    23 views3 pages
    The document calculates effective annual interest rates for a loan of $10 million with nominal annual interest rates ranging from 12% to 8%. It shows that as the nominal interest rate decreases, the effective annual interest rate also decreases, ranging from 12.68% for a 12% nominal rate to 8.3% for an 8% nominal rate. The effective rate is higher than the nominal rate due to the compounding of interest over 12 monthly payment periods in a year.

    Original Description:

    Copyright

    © Attribution Non-Commercial (BY-NC)

    Available Formats

    XLS, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Report this Document
    The document calculates effective annual interest rates for a loan of $10 million with nominal annual interest rates ranging from 12% to 8%. It shows that as the nominal interest rate decreases, the effective annual interest rate also decreases, ranging from 12.68% for a 12% nominal rate to 8.3% for an 8% nominal rate. The effective rate is higher than the nominal rate due to the compounding of interest over 12 monthly payment periods in a year.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as XLS, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    23 views3 pages

    23 Effective Rate of Interest Calculations

    Uploaded by

    sreekanthsubbarao
    The document calculates effective annual interest rates for a loan of $10 million with nominal annual interest rates ranging from 12% to 8%. It shows that as the nominal interest rate decreases, the effective annual interest rate also decreases, ranging from 12.68% for a 12% nominal rate to 8.3% for an 8% nominal rate. The effective rate is higher than the nominal rate due to the compounding of interest over 12 monthly payment periods in a year.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as XLS, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 3

    CALCULATION OF EFFECTIVE RATE OF INTEREST PER YEAR

    LOAN AMOUNT 10,000,000.00


    INTEREST RATE
    12.00% 11.75% 11.50% 11.25% 11.00%

    LOAN Loan Amount 10,000,000.00 10,000,000.00 10,000,000.00 10,000,000.00 10,000,000.00

    TERM Number of Payments 1 1 1 1 1

    Number of Payment Period in a year (e.g.


    12 12 12 12 12
    monthly installments = 12

    Nominal Annual Interest Rate 12.00% 11.75% 11.50% 11.25% 11.00%

    INTEREST Nominal Periodic Interest Rate 1.00% 0.98% 0.96% 0.94% 0.92%

    Value of Each Payment 10,100,000.00 10,097,916.67 10,095,833.33 10,093,750.00 10,091,666.67

    Commission Deducted from Loan Amount at


    COMMISSION 0.00% 0.00% 0.00% 0.00% 0.00%
    time of Disbursement

    FEES Charge added to each installment - - - - -

    Periodic Interest Rate 1% 1% 1% 1% 1%

    Annual Percentage Rate 0.1200000000001 0.1175000000001 0.1150000000001 0.1124999999999 0.11

    Effective Annual Interest Rate 12.68% 12.40% 12.13% 11.85% 11.57%

    Note:
    You will be permitted to put value only on coloured cells

    All Suggestions / Comments Welcome, in case any query please call: Bivas Nag (091430-98082) / bivas_kumar@yahoo.com
    INTEREST RATE
    10.75% 10.50% 10.25% 10.00% 9.75% 9.50% 9.25% 9.00%

    10,000,000.00 10,000,000.00 10,000,000.00 10,000,000.00 10,000,000.00 10,000,000.00 10,000,000.00 10,000,000.00

    1 1 1 1 1 1 1 1

    12 12 12 12 12 12 12 12

    10.75% 10.50% 10.25% 10.00% 9.75% 9.50% 9.25% 9.00%

    0.90% 0.88% 0.85% 0.83% 0.81% 0.79% 0.77% 0.75%

    10,089,583.33 10,087,500.00 10,085,416.67 10,083,333.33 10,081,250.00 10,079,166.67 10,077,083.33 10,075,000.00

    0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

    - - - - - - - -

    1% 1% 1% 1% 1% 1% 1% 1%

    0.1075 0.1050000000001 0.1025000000001 0.0999999999999 0.0974999999999 0.095 0.0925000000001 0.0900000000001

    11.30% 11.02% 10.75% 10.47% 10.20% 9.92% 9.65% 9.38%

    All Suggestions / Comments Welcome, in case any query please call: Bivas Nag (091430-98082) / bivas_kumar@yahoo.com
    INTEREST RATE
    8.75% 8.50% 8.25% 8.00%

    10,000,000.00 10,000,000.00 10,000,000.00 10,000,000.00

    1 1 1 1

    12 12 12 12

    8.75% 8.50% 8.25% 8.00%

    0.73% 0.71% 0.69% 0.67%

    10,072,916.67 10,070,833.33 10,068,750.00 10,066,666.67

    0.00% 0.00% 0.00% 0.00%

    - - - -

    1% 1% 1% 1%

    0.0875000000002 0.0849999999999 0.0825 0.08

    9.11% 8.84% 8.57% 8.30%

    All Suggestions / Comments Welcome, in case any query please call: Bivas Nag (091430-98082) / bivas_kumar@yahoo.com

    You might also like