Periodic yield

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%

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%

See also

• Annual effective rate
• Discount rate
• Periodic discount rate
• Yield