effective interest rate based on your payment periods. Last, convert the effective rate to the nominal rate based on the bank’s compounding periods.
Example: Balance of a Savings Account. Starting today, you make monthly deposits of $25 into an account paying 5% interest compounded daily
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| 7E05E4<A;<= 5" | Periodic | ||
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365 | 1 |
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5 | j |
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| HGG68.&#%" | Calculates effective interest | ||||||
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| rate for daily compounding. |
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| nominal interest rate for |
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| monthly compounding. |
ee | " | Switches to TVM menu; | ||||||||||||
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| calculator line. |
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| interest rate in I%YR. |
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| Z | e | #$ 5?@2 JH=;< 0EAH" year; Begin mode. | |
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| 6: Interest Rate Conversions 89 |
File name : | Print data : 2003/7/11 | |||