FAQ About Stats related questions

1. Annual Effective interest rate - expresses the amount of interest as a percentage of the balance at the start of the period
2. Annual Effective discount rate - the amount of interest paid or earned as a percentage of the balance at the end of the annual period.
3. Continuous interest rates - Effective interest rates when compounding is happening every moment in time
4. Nominal Rates compounding p times - i(p)/p -- The nominal interest rate is the interest rate that is stated on a loan or investment. It is the percentage of the principal that is paid in interest each year. The nominal interest rate is not the same as the effective annual rate (EAR). The EAR takes into account the effects of compounding, which means that interest is earned on interest. The EAR is always higher than the nominal interest rate.

All the bank publish interest rates are nominal Annual rates compounded monthly.. e.g. 21% p.a mean monthly 21%/12

--First calculate the yearly effective rates by (1+r/12)^12-1 , then calculate the EMI based on no. of months of EMI

v = 1/(1+i) -- i is yearly effective interest rate , formula - (1-v^n)/i1