Get started with interest calcs
This course provides a step-by-step introduction to calculating interest amounts and interest rates.
This course provides a gentle introduction to understanding interest rates and calculating interest amounts. These calculations, in turn form the building blocks you will need to value a variety of financial instruments.
This knowledge is fundamental in the financial markets and will enable you to answer questions such as these:
How would a retail investor value a dividend expected to be received in two years’ time?
OR
How would a bank value a bond in their investment portfolio if there is another 25 payments to be received on different future dates?
We start things off with the fundamentals and then contrast simple and compound interest rate calculations. Next we solve present values and conclude the discussion with the calculation of discount factors – an understanding of which will ease calculations with multiple cashflows.
“At all times, in all markets, in all parts of the world, the tiniest change in rates changes the value of every financial asset.”
Warren Buffett
What you will learn
Simple interest
How to interpret simple interest
Calculate simple interest amounts and future values
Compound interest
Gain an appreciation of the effect of compounding
Explore market conventions
Calculations
Calculate discounted cash flows
Calculate effective interest rates earned
Meet Emil Nysschens
With a career that spans 25 years, the founder of Risk-Nation spent the first 10 years of his career in the accounting, investment.
He subsequently spent the next 15 years as a programme director, mathematician, financial markets trainer and learning designer.
Emil lives in Johannesburg, South Africa and, in his free time, he pursues his musical interests.