Event Title

Internal Rate of Return and Corresponding Effective Interest Rate for Loans

Session

Management, Business and Economics

Description

In this paper some techniques for calculating the internal rate of return (IRR) for several types of loans offered by banks and other micro financial institutions, and their respective effective interest rates are shown. Some examples of calculating the internal rate of return for loans without a fee, and those with fees are given and the effective interest rate for those loans is calculated. The mathematical model for calculation of the internal rate of return and the effective interest rate is shown. For accurate calculations the financial consultant CASIO FC -100V is used.

Keywords:

nominal interest rate, periodical interest rate, internal rate of return (IRR), effective interest rate, fee

Session Chair

Besnik Skenderi

Session Co-Chair

Sema Kazazi

Proceedings Editor

Edmond Hajrizi

ISBN

978-9951-437-54-7

Location

Durres, Albania

Start Date

28-10-2017 11:00 AM

End Date

28-10-2017 12:30 PM

DOI

10.33107/ubt-ic.2017.260

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Oct 28th, 11:00 AM Oct 28th, 12:30 PM

Internal Rate of Return and Corresponding Effective Interest Rate for Loans

Durres, Albania

In this paper some techniques for calculating the internal rate of return (IRR) for several types of loans offered by banks and other micro financial institutions, and their respective effective interest rates are shown. Some examples of calculating the internal rate of return for loans without a fee, and those with fees are given and the effective interest rate for those loans is calculated. The mathematical model for calculation of the internal rate of return and the effective interest rate is shown. For accurate calculations the financial consultant CASIO FC -100V is used.