MHB Converting to a tri-monthly interest rate

  • Thread starter Thread starter linapril
  • Start date Start date
  • Tags Tags
    Interest Rate
AI Thread Summary
To convert an APR of 3% to a tri-monthly interest rate, the formula used is (0.03 + 1)^(4/12) - 1. This calculation is based on the future value formula for investments, where A represents the future value, P is the principal amount, r is the annual nominal interest rate, n is the number of compounding periods per year, and t is the time in years. In this scenario, r is set to 0.03 and n is 4, reflecting the quarterly compounding. The method ensures accurate conversion of the annual rate to a tri-monthly basis. Understanding this calculation is essential for effective financial planning and investment strategies.
linapril
Messages
22
Reaction score
0
If the APR is 3%, and I want to find the tri-monthly interest rate, is the correct way to find it:

(0.03+1)^(4/12)-1
?
 
Mathematics news on Phys.org
Taken from Wikipedia:

The formula for calculating the future value of an investment having an annual nominal interest rate is:

$\displaystyle A=P\left(1+\frac{r}{n} \right)^{nt}$

where:
  • A = future value
  • P = principal amount (initial investment)
  • r = annual nominal interest rate (as a decimal, not in percentage)
  • n = number of times the interest is compounded per year
  • t = number of years

In your case r = 0.03 and n = 4.
 

Thread 'Non-orthogonal bases'

Suppose ,instead of the usual x,y coordinate system with an I basis vector along the x -axis and a corresponding j basis vector along the y-axis we instead have a different pair of basis vectors ,call them e and f along their respective axes. I have seen that this is an important subject in maths My question is what physical applications does such a model apply to? I am asking here because I have devoted quite a lot of time in the past to understanding convectors and the dual...
View full post »

Thread 'What Exactly is Dirac’s Delta Function? - Insight'

Insights auto threads is broken atm, so I'm manually creating these for new Insight articles. In Dirac’s Principles of Quantum Mechanics published in 1930 he introduced a “convenient notation” he referred to as a “delta function” which he treated as a continuum analog to the discrete Kronecker delta. The Kronecker delta is simply the indexed components of the identity operator in matrix algebra Source: https://www.physicsforums.com/insights/what-exactly-is-diracs-delta-function/ by...
View full post »

Similar threads

MHB Calculating Your $10,000 Loan Payment
Replies
8
Views
2K
B Excel: converting a 3-ish week count into a monthly count
Replies
15
Views
1K
MHB Simple Interest Investment: How Long Will It Take to Grow $550,000 to $720,000?
Replies
1
Views
1K
MHB F.6.1 - Interest Rate Fundamentals
Replies
1
Views
2K
MHB Calculating Loan Payments: A Simple Formula
Replies
1
Views
2K
MHB Continuous Compounding over 12 months (finding the rate)
Replies
2
Views
2K
MHB Tracking Monthly Finance Charges for Overdue Invoices: A Spreadsheet Solution?
Replies
3
Views
2K
Given price of an annuity and its level payments, find the interest rate
Replies
1
Views
1K
MHB Effective Rate of Interest
Replies
2
Views
1K
MHB Solve Logarithms Problems: Find Profit & Interest Rate
Replies
3
Views
2K

Hot Threads

Recent Insights

Back
Top