Simple Interest as a Special Case of Compound Interest
Session
Management, Business and Economics
Description
In this paper it is shown that the simple interest can be considered as a special case of that compound one, and thus, we are able to calculate the effective interest rate (EIR) for simple interest deposits. Some examples of calculating the balance for simple interest deposits by using the formula for the balance of the compound interest and their corresponding effective interest rates are shown. A mathematical formula for calculation of the effective interest rate for simple interest deposits is given. Instructions of using the financial consultant CASIO FC -100V for accurate calculations, are also shown.
Keywords:
Simple Interest, Compound Interest, Effective Interest Rate.
Session Chair
Naim Preniqi
Session Co-Chair
Muhamet Gërvalla
Proceedings Editor
Edmond Hajrizi
ISBN
978-9951-550-19-2
Location
Pristina, Kosovo
Start Date
26-10-2019 5:15 PM
End Date
26-10-2019 6:45 PM
DOI
10.33107/ubt-ic.2019.388
Recommended Citation
Limani, Ramadan, "Simple Interest as a Special Case of Compound Interest" (2019). UBT International Conference. 388.
https://knowledgecenter.ubt-uni.net/conference/2019/events/388
Simple Interest as a Special Case of Compound Interest
Pristina, Kosovo
In this paper it is shown that the simple interest can be considered as a special case of that compound one, and thus, we are able to calculate the effective interest rate (EIR) for simple interest deposits. Some examples of calculating the balance for simple interest deposits by using the formula for the balance of the compound interest and their corresponding effective interest rates are shown. A mathematical formula for calculation of the effective interest rate for simple interest deposits is given. Instructions of using the financial consultant CASIO FC -100V for accurate calculations, are also shown.