lifecontingencies (version 0.0.7)

nominal2Real: Function to convert nominal interest rate to real interest rate.

Description

This function evaluates the real (also known as effective) interest (or discount) rate given the nominal interest (or discount) rate compounded m-times.

Usage

nominal2Real(i, m = 1, type="interest")

Arguments

i

Nominal interest rate.

m

Numbers of compounding periods.

type

Either interest rate or discount rate

Value

• A numeric value is returned.

References

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

See Also

real2Nominal

Examples

#a nominal rate of 0.12 equates an APR of
nominal2Real(i=0.12, m = 12, "interest")