annual equivalent rate

[billybarker]

hi

i read something similar in a past thread, but based on cashflows.

i am trying to calculate the AER of an investment that is offering
8.00% at the end of a two year term.

Interest is applied at the end of the term, but is accrued/calculated
daily.

Any help would be great. tried XIRR, couldn't get it to work.

Thanks


Bill

 

[Don Guillett]

See if this helps
http://tinyurl.com/4vmrz

 

[billybarker]

thanks don

the only problem is that the formulaes quoted are based on regular or
equal contributions, e.g re payment of loans or staggered investments.

The problem I have is that there will only be one deposit on day one
and theinvestment runs for two years. Interest is applied at the end
of year two for the full term of the investment.

So how do you build this into a formulae most ask for the number of
contributions throughout the term,which is zero or one.
Either way the formulaes i've seen do not appear to work.

There must be an easy way of working any end rate backwards over the
number of years of an investment.

Thanks

Bill

 

[Myrna Larson]

You can set the amount of the payment to 0.

thanks don

the only problem is that the formulaes quoted are based on regular or
equal contributions, e.g re payment of loans or staggered investments.

The problem I have is that there will only be one deposit on day one
and theinvestment runs for two years. Interest is applied at the end
of year two for the full term of the investment.

So how do you build this into a formulae most ask for the number of
contributions throughout the term,which is zero or one.
Either way the formulaes i've seen do not appear to work.

There must be an easy way of working any end rate backwards over the
number of years of an investment.

Thanks

Bill


"Don Guillett" <[email protected]> wrote in message