|
|
Exact interest |
|
|
|
 Home Site Map Add Term Search About Us Contributors |
Exact interestInterest paid based on the basis of a 365-day/year schedule by a bank or other financial institution as opposed to a 360-day basis (ordinary interest). Difference can be material when large principal sums of money are involved.Exact interest Similar MatchesInterestInterestThe charge you pay if you borrow money, and the income you receive if you lend it or invest it in an income-producing bank account or in a security like a bond or a gilt. For example if you borrow £1,000 at an interest rate of 10% per year, the interest payable is £100 per year. Loans are sometimes made at fixed rates of interest, and sometimes at variable rates.If you invest £1,000 at 10%, then you as lender expect to receive £100 interest. If instead of spending the interest, you reinvest it in the same security, then at the start of the second year you will have £1,100 invested and attracting 10%, so at the end of the second year you expect to receive £110 interest. This is the principle of compound interest, where you get rolling interest on your original capital and on the reinvested income. Deferred interest bondDeferred interest bondA bond that pays interest at a later date, usually in one lump sum, effectively reinvesting interest earned over the life of the bond. See: Zero coupon bond. Net interest cost (NIC)Net interest cost (NIC)The total amount of interest that will be paid on a debt obligation by a corporate or municipal bond issuer. Short interest theoryShort interest theoryThe theory that a large interest in short positions in stocks will precede a rise in the market prices, because the short positions must eventually be covered by purchases of the stock. Interest sensitive insurance policyInterest sensitive insurance policyA cash value life insurance policy whose insurance dividend rates vary with respect to inflation, enabling the policyholder to avoid the loss of purchasing power associated with inflation. Further SuggestionsEffective annual interest rateInterest rate parity theorem Interest expense Assumed interest rate Interest tax shield Interest Amortizing interest rate swap compound interest And interest Wild Interest Compound interest Forward interest rate Earnings before interest, taxes, and depreciation (EBITD) Nominal interest rate True interest cost Interest rate parity line (IRP) Future Interest Interest rate Party in interest Mortgage interest deduction Interest only loan Interest Cap simple interest Add on Interest Interest parity |
|
|
|