Annual yield

This topic has 1 reply, 2 voices, and was last updated 11 years ago by John Moffat.

Viewing 2 posts - 1 through 2 (of 2 total)

Author

Posts
October 29, 2014 at 4:36 pm #206605
stacie395
Participant
- Topics: 39
- Replies: 54
If 6.165% is the yield for 6 months, how do we determine the annual yield…?…straight away multiply with 2…?
October 29, 2014 at 8:48 pm #206646
John Moffat
Keymaster
- Topics: 57
- Replies: 54859
If ‘r’ is the 6 monthly rate, and ‘R’ is the yearly rate, then (1+R) = (1+r)^2

So in this example, the yearly rate = R = 1.06165^2 – 1

(For more examples, watch the Paper F2 lecture on Interest.)
Author

Posts

Viewing 2 posts - 1 through 2 (of 2 total)

You must be logged in to reply to this topic.