Enjoyed the video? Then please press the like button, and subscribe to the channel! A relevant related video on my channel is the one on simple vs compound interest kzitem.info/news/bejne/wpub0YV3iWeqd44 And if you want to play around with the effective annual interest rate in Excel, then this video is for you: kzitem.info/news/bejne/mYahs4FnmHakmIo
@GeorgeChugunadze
6 ай бұрын
The best clarification I've ever seen. Thanks for you efforts.
@TheFinanceStoryteller
6 ай бұрын
Glad it was helpful! Thank you for the kind words. Please consider supporting the channel through a membership: kzitem.info/rock/QQJnyU8fALcOqqpyyIN4sgjoin
@joeygarza9550
Жыл бұрын
Dude, I learn so much from these videos of yours! Thank you.
@TheFinanceStoryteller
Жыл бұрын
Glad you like them! Happy to help. Please share the word with friends and colleagues.
@ginmartha4621
Жыл бұрын
very clear explanation, thanks!
@TheFinanceStoryteller
Жыл бұрын
Happy to help! Play around with it a bit in Excel, that really helps to get your head around it: kzitem.info/news/bejne/mYahs4FnmHakmIo
@minakh4814
Ай бұрын
What are the key differences between EIR and nominal interest rates?
@TheFinanceStoryteller
Ай бұрын
It seems like you are trying to get someone else to answer your homework question for you. You will learn a lot more if you research it yourself. The video is only 6 minutes long, you will find the answer if you watch it.
@isabellaschultze1586
4 ай бұрын
When you say the higher the interest rate, do you mean the higher the nominal rate or higher EAR? I am a bit confused...
@TheFinanceStoryteller
4 ай бұрын
Good catch! I should have phrased that as: "The higher the NOMINAL interest rate, and the more frequent the compounding periods, the bigger the difference between nominal and effective rate".
@TheFinanceStoryteller
4 ай бұрын
Play around with it a bit in Excel, and you will see how nominal rate and EAR relate: kzitem.info/news/bejne/mYahs4FnmHakmIo
@Cyanide157
Жыл бұрын
But at a nominal rate after 1 year, do we take the original principal value or new value 10,600 as in this case
@TheFinanceStoryteller
Жыл бұрын
Correct. In the second year, for the Bank A example, the $10,600 is the new basis for compounding.
@Cyanide157
Жыл бұрын
@@TheFinanceStoryteller ok thanks
@shrikantbadge3978
Жыл бұрын
You channel is a treasure
@TheFinanceStoryteller
Жыл бұрын
Thank you so much for the kind words!!! Please share with friends and colleagues.
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