Get started with interest calculations
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.
With this fundamental knowledge you will be enable to answer questions such as these:
How will an investor value a bond coupon to be received in two years’ time?
OR
How would a fund determine which of several alternative interest rates will produce the best investment?
We start things off with the fundamentals before contrasting simple and compound interest rate calculations.
After this we solve present values and conclude the discussion with a number of more practical concepts including the calculation of discount factors (an understanding of which will ease calculations with multiple cashflows) and how to interpolate interest rates.
“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
Several Calculations
Calculate discounted cash flows
Calculate effective interest rates earned
Meet Emil Nysschens
With a career that spans 28 years, the founder of Risk-Nation has spent the first 10 years of his career in the accounting and asset management spheres.
From 2008 he subsequently spent the second part of his career as a Programme Director, mathematician, financial markets trainer and learning designer.