lifecontingencies (version 0.9.2)

real2Nominal: Function to switch from APR to nominal m-periods interest rate

Description

This functions switches from nominal to effective APR.

Usage

real2Nominal(i, k = 1,type="interest")

Arguments

i

Annual effective interest rate.

k

Compounding periods.

type

Either "interest" rate of "discount" rate

Value

• A numeric value

Warning

The function is provided as is, without any warranty regarding the accuracy of calculations. The author disclaims any liability for eventual losses arising from direct or indirect use of this software.

Details

The function follows the equation $\left( {1 + i} \right)^t = (1 - d)^{ - t} = \left( {1 + \frac{{{i^{\left( k \right)}}}}{k}} \right)^{k*t} = \left( 1 - \frac{{{d^{\left( k \right)}}}}{k} \right)^{ - k*t}$

References

Broverman, S.A., Mathematics of Investment and Credit (Fourth Edition), 2008, ACTEX Publications.

See Also

nominal2Real

Examples

#an APR of 0.12 corresponds to a nominal rate monthly compounded of
 
real2Nominal(i=0.12, k = 12)