Composition of interest rates

Formula

Composition of interest rates formula
it
nominal interest at the time of the loan
rt1
real interest expected over the period of the loan
pit1
inflation expected over the period of the loan
sigma
representative value for the risk engaged in the operation

Formula description

Interest is a fee paid by a borrower of assets to the owner as a form of compensation for the use of the assets. It is most commonly the price paid for the use of borrowed money,or money earned by deposited funds.rnSimple interest is calculated only on the principal amount, or on that portion of the principal amount that remains unpaid.

Calculator (how to use calculator?)

Composition of interest rates formula
rt1
pit1
sigma
it
Precision

Formula code








References

  1. Wikepedia:Composition of interest rates.

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