Periodic yield: Difference between revisions
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imported>Doug Williamson (Add example) |
imported>Doug Williamson (Refine figures.) |
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= (1.00 / 0.97) - 1 | = (1.00 / 0.97) - 1 | ||
= 0. | = 0.030928 | ||
= 3. | = 3.0928% | ||
Revision as of 10:54, 25 October 2015
A rate of return - or cost of borrowing - expressed as the proportion by which the amount at the end of the period exceeds the amount at the start.
Example 1
GBP 1 million is borrowed.
GBP 1.03 million is repayable at the end of the period.
The periodic yield (r) is:
(End amount / start amount) - 1
= (1.03 / 1) - 1
= 0.03
= 3%
A rate of return - or cost of borrowing - expressed as the proportion by which the amount at the end of the period exceeds the amount at the start.
Example 2
GBP 0.97 million is borrowed.
GBP 1.00 million is repayable at the end of the period.
The periodic yield (r) is:
(End amount / start amount) - 1
= (1.00 / 0.97) - 1
= 0.030928
= 3.0928%
