Applied or nominal interest rate 


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Applied or nominal interest rateThe rate used to calculate the interest due.Applied or nominal interest rate Similar MatchesNoninterest bearing noteNoninterest bearing noteA note without periodic interest payment, but selling at a discount and maturing at face value. See: Zerocoupon bond. Bond interest yieldBond interest yieldYield calculations on bonds aim to show the return on a gilt or bond as a percentage of either its nominal value or its current price. There are three types of yield calculation that are commonly used:Nominal YieldThis is calculated by dividing the annual income on the bond by its nomina or 'par' value. So the nominal yield on a £100 bond which pays 5% interest per year is 5/100 x 100 = 5%.Current or 'Running Yield'This is calculated by dividing the annual income on the bond by its current market price. So if the market price of the £100 bond dropped to £95, the current yield on the bond at that time would be 5/95 x 100 = 5.36%. Note that as the market price of a bond drops, its yield goes up.Redemption Yield'The Redemption Yield shows what the total return on a bond would be if held to its maturity date. It reflects not only the interest payments a bondholder will receive, but also the gain/loss he will make when it matures. The income element is the same 'current yield' calculation performed above. The gain/loss element is calculated by taking the difference between the current market price and the nominal value of the bond (e.g. in our example 100  95 = 5), dividing it by the number of years til maturity (assume 5 years for simplicity, so 5/5 = 1) and then dividing that figure by the current price of the bond (1/95 x 100 = 1.05%) The yield to redemption is the sum of the current yield (5.36%) and the capital yield (1.05%) = 6.41%. Minority interestMinority interestAn outside ownership interest in a subsidiary that is consolidated with the parent for financial reporting purposes. Spot interest rateSpot interest rateInterest rate fixed today on a loan that is made today. Related: Forward interest rates. Open interestOpen interestThe net amount of outstanding open positions, either long or short, in a given futures or options contract. Further SuggestionsInterest only mortgagesAssumed interest rate Consumer interest Effective annual interest rate Risk Free Interest Rate interest rate swap Interest rate ceiling Open interest Earnings before interest after taxes (EBIAT) And interest interest only mortgage Lessees Interest Interest equalization tax Cash flow after interest and taxes Interest Cap Interest rate Interest expense Discount Interest Matured noninterest bearing debt stepped interest debenture stocks Compound interest Deferred interest mortgage Net interest cost (NIC) Interest sensitive insurance policy Earnings before interest, taxes, and depreciation (EBITD) 
