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Types of interest

This topic has 3 replies, 2 voices, and was last updated 3 years ago by John Moffat.

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July 31, 2021 at 8:52 pm #629968
accountguy
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How many types of interest are there such as Simple Interest, Compound Interest or Effective Interest, and many more if you can tell and explain the types of different interests?
August 1, 2021 at 8:54 am #629995
John Moffat
Keymaster
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They are not different types of interest but different ways of stating the interest rate.
They are all explained in my free lectures on interest. The lectures are a complete free course for Paper MA and cover everything needed to be able to pass the exam well.
August 1, 2021 at 9:40 am #630008
accountguy
Member
- Topics: 32
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Yes Sir, I have seen your lecture on Simple interest, Compound Interest but I could not anything on Effective interest that what it is. Could you please then explain that to me?
Secondly, I guess from seeing the lecture that there are only two ways of stating the interest rate which are simple interest and compound interest. Am I right here?
August 1, 2021 at 3:16 pm #630042
John Moffat
Keymaster
- Topics: 57
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I certainly do explain what the effective interest rate is. Try reading page 95 of our lecture notes where there is an example headed up ‘effective rate’, and the lectures work through the example and explain it.
You second sentence is correct.
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