30 years: Financial markets trader
In this video, Abdulla covers the basic interest rates we are likely to encounter and uses a spreadsheet example.
In this video, Abdulla covers the basic interest rates we are likely to encounter and uses a spreadsheet example.
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7 mins 58 secs
Interest exists because money is a valuable asset. Money allows investors to invest and earn a return or yield. If money is lent, investors are denying themselves that opportunity, so access to money belonging to another party has to be paid for. The interest rate is the cost of accessing that money.
Key learning objectives:
Understand why interest exist
Define simple or nominal interest
Describe the periodic rate
Describe the effective annual rate
Describe the continuously compounded rate
This content is also available as part of a premium, accredited video course. Sign up for a 14-day trial to watch for free.
This content is also available as part of a premium, accredited video course. Sign up for a 14-day trial to watch for free.
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