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Interest Rate vs Yield

This topic has 1 reply, 2 voices, and was last updated 2 years ago by John Moffat.

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May 15, 2022 at 9:18 am #655666
Cherry14
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Hello Sir John,
Can you please explain the difference between Interest Rate and Yield (with an example if possible)?
May 15, 2022 at 9:59 am #655678
John Moffat
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The interest rate is the rate paid on the nominal value.
The yield is the overall return to investors, which is the IRR of the pre-tax flows to the investor.
I do work through examples in my free lectures.
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