8 is the interest rate for the whole year or for 4 interest periods. One very important exponential equation is the compound -interest formulawhere A is the ending amount P is the beginning amount or principal r is the interest rate expressed as a decimal n is the number of compoundings a year and t is the total number of years. Calculate Interest solve for I.
360 divided by 182 multiplied by 00167 from above gives us 0033 or a 33 annual.
One very important exponential equation is the compound -interest formulawhere A is the ending amount P is the beginning amount or principal r is the interest rate expressed as a decimal n is the number of compoundings a year and t is the total number of years. This may seem high but remember that in the context of a loan interest is really just a fee for borrowing the money. A P 1 r n n t A 1 000 000 1 06 12 12 5 A 1 000 000 1 0005 12 5 A 1 000 000 1005 60 A 1 348 85015. The final step is to multiply that result by the 360 divided by the days to maturity 182 in this case.