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Members Of The Group. Natindim, Dexter. Valledor, Christian Jay.

Home. Search. Playlist. Topic. Types of Interest.

Home. Search. Playlist. Topics. Types of Interest.

Fixed – a specific, fixed interest tied to a loan. Variable – an interest that can fluctuate depending on the movement of base interest rates. APR – the amount of your total interest expressed annually on the total cost of the loan Prime Rate – the interest that bank often give to preferred customers for loans..

– Is interest in which only the original amount of money borrowed or deposited, also known as the principal, bears interest for the entire term of the loan..

simple interest Interest is a fæ paid for borrowing money or other assets. amount is the principal. The interest is expressed as a percentage rate of the for a given time interval. Simple Interest Formula T -Tine WTE: Convet to a or a frætm For exm1J*e. if the rate is 5%. ttw•l OS the formula. Example - borrowing money. To buy a new car I to for 3 years at a rate of 10% per annum. What will my total repayments 1=PxRxT = $20,000 x 0.1 x 3 = $6,000 Total repayments = P + I = S20,cm + $6,000 NOTE annum means year My total repayments will be S26,Ü.n Example - investing money. The bank interest rate for term decx»sits was annum. How much interest would an investment of TERM DEPOSIT invot $60,000.00 for 6 months earn? 1=PxRxT = $60,cm x 0.03 x 0.5 The would earn NOTE 6 rnonthS 0.5 of a year.

– Compound interest is the addition of interest to the principal sum of a loan or deposit, or in other words, interest on interest..

Compound Growth An amount is increased or decreased by a percentage The rocess is repeated several times at each interval The most efficient wa to do this is usin a Multi lier The general formula for compound growth and decay Years Interest Growth Principal X Rate Decay E4000 is invested at a rate of 5% p.a for three years. Calculate Final value of the investment after three years. E4000 x 1.053 = E4630.50 A car worth E15000 depreciates in value at a rate of 15% p.a. What is the depreciated value of the car after 4 years E15000xO.85 = E7830.09 To calculate other parts of the formula, you will need to change the subject.

Home. Search. Playlist. Topic. Types of Interest.

Home. Search. Playlist. Topics. Types of Interest.

where, P = Value of each payment r = Rate of interest per period in decimal n = Number of periods.

● Dan was getting $100 for 5 years every year at an interest rate of 5%. Find the future value of this annuity at the end of 5 years? Calculate it by using the annuity formula. Solution The future value Given: r = 0.05, 5 years = 5 yearly payments, so n = 5, and P = $100 FV = P×((1+r) n −1) / r FV = $100 × ((1+0.05) 5 −1) / 0.05 FV = 100 × 55.256 FV = $552.56 Therefore, the future value of annuity after the end of 5 years is $552.56..

Home. Search. Playlist. Topics. Types of Interest.

Bonds – also known as fixed-income security Stocks – also known as equity Mutual funds – a collection of stocks, bonds, money market instruments, and other assets.

When you buy a bond, you are lending your money to the bond issuer and in return, you receive interest payments at a specific (fixed) interest rate over a specific (fixed) time period. A bond , also known as a fixed-income security, is a debt instrument created for the purpose of raising capital. They are essentially loan agreements between the bond issuer and an investor, in which the bond issuer is obligated to pay a specified amount of money at specified future dates.

WHAT IS A BOND? BIFIiId are issued by vernmentS. companies and financial institutions The investor lends money to the issuer of a tx)nd and is after maturity is reached Income through in- terest on rnoney Resale of a EK»nd is R'y„out Of ore lower than that of stocks Risk the issuer defaul• tx)nds Risk of falling viekis.

Stock , also known as equity, r epresents ownership interests in corporations. Whether you own one, 100 or 100 million shares of stock in a company, you're an owner of the company..

EXAMPLE: RETURN ON STOCK You buy 100 shares of stock in Company X on February 2, 2006, paying $28.50 per share. On February 2, 2007, you receive a dividend of $0.60 per share and the stock price had risen to $29.75 per share. Find the following. a) Your total cost for the stock b) The total dividend amount c) The capital gain if you sold the stock d) The total retum and percentage return for one year of ownership of this stock.

A mutual fund is a collection (or portfolio) of stocks, bonds, and other investments that are managed by a professional team. Individual investors buy shares in a mutual fund and everyone’s money is pooled. The managers buy and sell the investments in the fund’s portfolio with the aim of increasing its value over time..

Home. Search. Playlist. Topic. Types of Interest.

Home. Search. Playlist. Topic. Types of Interest.

Home. Search. Playlist. Topic. Types of Interest Annuity Types of Investments.