Interest basics(每天进步一点点)

Interest : 10%/ year

Principal : $100

How much do I own in 10 years?

100 (1+10%)^10

$P = principal

r = rate , 100r%

t years

p(1+r)^t

t     

0         P

1          P  + RP = P(1+R)

2         P + RP + RP = P(1+2R)

3         P + RP + RP + RP = P (1+ 3R)

.....

t         P(1 + tR)

 

Annual Percerntage Rate( APR ) and effective APR

The annual percentage rate (APR) that you are charged on a loan may not be the amount of interest you actually pay. The amount of interest you effectively pay is greater the more frequently the interest is compounded. In this video, we calculate the effective APR based on compounding the APR daily. 

APR - Annual Percerntage Rate

22.9% (0.06274% daily perioding rate)

0.06274% x 365 = 22.9%

(1.0006274)^365

 

Institutional roles in issuing and processing credit cards

 

 

 

 Payday loans

Payday loans, which are sometimes called cash advances, are a form of unsecured short-term loans that are typically associated with very high interest rates. In this video we explore an example of a payday loan and use that to better understand the defining characteristics of a payday loan, and how they translate into an effective interest rate.