Finance Fundamentals

Interest Rates

Nominal rate / Quoted Rate / Stated Rate / Annual Interest Rate: Denote by $i^{(m)}$. If $m$ is number of interest periods per year, $i$ is interest rate per interest period,

$$i = \frac{i^{(m)}}{m}$$

This gives, if n is number of interest periods, assuming Simple Interest

$$P_n = P_0(1 + ni)$$