Learn how to calculate simple and compound interest with the help of suitable examples. Calculation of Simple Interest: Simple interest is the interest calculated on the original principal only for the time during which the money lent is being used. Simple interest is paid or earned on the principal amount lent or borrowed. Simple interest is ascertained with the help [...]
Learn how to calculate present value and discount factors of investment of a firm. Calculation of Present Value: It is a method of assessing the worth of an investment by inverting the compounding process to give present value of future cash flows. This process is called “discounting”. The present value of 'P' of the amount 'A' due at the end [...]
Benchmark rates are rates or the prices of instruments that are traded in the market which are used for pricing of other instruments. These rates or prices are used as benchmark for floating rate instruments. In the fixed income market, it is an interest rate that the market respects and closely watches. Typically a benchmark rate should satisfy the following [...]