MATH 2FM3 Lecture Notes - Lecture 3: Anisette, United States Treasury Security, Interest
12 Sep 2016
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Definition : equivalent interest rates are rates that lead to the same growth over the same time period. Example : 0. 75% interest rate per month is equivalent to 9. 38% interest rate per year . Definition : compound growth interest rate at role: after t units of time is written as alt ) = ( i tilt. The growth investment amount (accumulated wealth function) is written as : Att ) = a ( i ii )t. I year and i c the interest rate per year ) the growth investment amount is. After m months is ao ( i ii . After fractions of a year given interest t i per year , leading to simple growth rate function : interest rate ( aka yield) is used . will grow to ( hit ) a- (d= ( hit ) and the growth amount function :
