Explanation of the Effective Annual Rate of Interest (EAR)

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  • เผยแพร่เมื่อ 23 ต.ค. 2024

ความคิดเห็น • 90

  • @SamA-nc7fh
    @SamA-nc7fh 3 ปีที่แล้ว +18

    Watching your videos has made me realize just how bad my accounting professor is. In 30 minutes I understand more than I have in the first 10 weeks of the semester. Thank you

  • @laurenong9658
    @laurenong9658 3 ปีที่แล้ว +5

    EAR explained in an 11min video better than my 1h30min lecture could. Thank you.

  • @anhibitor1023
    @anhibitor1023 5 ปีที่แล้ว +12

    Wow, I finally understand continually compounded interest. The way you explain things is so clear, it just makes sense. Thanks a lot!

  • @bluecute123
    @bluecute123 3 ปีที่แล้ว +6

    The best 12 minutes of my life. Thank you.

    • @Edspira
      @Edspira  3 ปีที่แล้ว

      Thank you!

  • @alaataha2473
    @alaataha2473 6 ปีที่แล้ว +6

    Your explanation is so simple .. Thanks for the help!

  • @tazeking8033
    @tazeking8033 4 ปีที่แล้ว

    YOU ARE THE ONLY ONE THAT ACTUALLY 'EXPLAINS' EFFECTIVE INTEREST!!!! THANK YOU!!!!

  • @simeonaleksandrov7954
    @simeonaleksandrov7954 9 ปีที่แล้ว +53

    Now, that's a beautifully explained material !!!

    • @Edspira
      @Edspira  9 ปีที่แล้ว +5

      Thank you!

  • @johndouh3717
    @johndouh3717 4 ปีที่แล้ว

    Thank you very much!!!! could you please make more videos??? specifically:
    M&M theory,
    Fama-French three-factor model,
    Modern portfolio theory?
    + equity valuation -
    - How to estimate a company’s cost of capital?
    - More on how to value a company using multiples and discounted cash flow (DCF) analysis ?
    - More on how to value a company in the context of an acquisition (M&As), of a leveraged buyout
    (LBO) or of an initial public offering (IPO)? thank you so much!!!! these video literally saved me from failing!

  • @MrBryanGamboa
    @MrBryanGamboa 4 ปีที่แล้ว +1

    Wow! Ive been hours trying to understand this, you nailed it in less than 15 minutes! Thanks a lot!

  • @prateekkundra5019
    @prateekkundra5019 5 ปีที่แล้ว +2

    This channel is like gold mine 😍

  • @ceebersss
    @ceebersss 8 ปีที่แล้ว +8

    mate youre a legend, wish you were my lecturer instead :)

    • @Edspira
      @Edspira  8 ปีที่แล้ว +1

      Thank you for the kind words!

  • @viniciusmorche7213
    @viniciusmorche7213 2 ปีที่แล้ว

    Thx man! You saved a student!

  • @MrDhesan
    @MrDhesan 4 ปีที่แล้ว +2

    Hi Edspira , I hope this finds you well , firstly thank you for your tutorial , could you please if possible indicate to me in which order do I nee do through your Corporate Finance videos (71 videos)

    • @ranivde6517
      @ranivde6517 4 ปีที่แล้ว

      I’d definitely want to know the same thing

  • @tharupahanjayawardana1266
    @tharupahanjayawardana1266 4 ปีที่แล้ว +1

    You're doing such a great job. Everything makes sense. Thanks so much

  • @nihalkenawy6547
    @nihalkenawy6547 4 ปีที่แล้ว

    Your video very useful and short in same time
    Why you doesn't explain CFA curriculum please

  • @heinrichjacobs1291
    @heinrichjacobs1291 8 ปีที่แล้ว +45

    Well said although you must be a horrible person if you are excited to get the $1000 after a relative dies.

    • @Edspira
      @Edspira  8 ปีที่แล้ว +9

      lol

    • @zsu2713
      @zsu2713 ปีที่แล้ว

      lol

  • @Nicholassalis11
    @Nicholassalis11 3 ปีที่แล้ว

    This is not the Effective Interest Rate defined in the IFRS 9 right? Because that definition is crazy!! I was looking for an explanation of it

  • @tarekalsherif57
    @tarekalsherif57 6 ปีที่แล้ว +2

    This is an Effective explanation!
    Thank you

    • @skylarkenneth3784
      @skylarkenneth3784 5 ปีที่แล้ว +1

      an effective minutely rate of explanations

  • @bhagatsingh5019
    @bhagatsingh5019 8 ปีที่แล้ว +1

    Thank you for your all beautifully explained videos.

  • @bibekadhikari2298
    @bibekadhikari2298 ปีที่แล้ว

    thanks for the video. is there effective annual rate of interest for loan as well or just for savings?

  • @Dante-zx1bu
    @Dante-zx1bu 3 ปีที่แล้ว +1

    Thanks it was much better than the book :)

    • @Edspira
      @Edspira  3 ปีที่แล้ว

      Glad you liked it!

  • @Juinor
    @Juinor 6 ปีที่แล้ว +2

    still watching this in 2018.

  • @vtj808
    @vtj808 9 ปีที่แล้ว +2

    Literally loveeeee it! Thank you very much for this video. Superb !

    • @Edspira
      @Edspira  8 ปีที่แล้ว +1

      +vtj808 Thank you!!

  • @goldilockszone4389
    @goldilockszone4389 8 ปีที่แล้ว

    May contextualising it with a large amount will give it the right perspective. The .95 cent as you mentioned is hardly a difference for worrying about this. The other thing is, can you go to you bank and ask them to change you interest rate to say quarterly or monthly ? Or what instruments would allow you to change your interest rates at your convenience ?

    • @Dr_No
      @Dr_No 5 ปีที่แล้ว

      As consumers, the best we can do is shop around and find the best deal available on the market. Only the mega-super wealthy could, perhaps, negotiate a customised compounding period and, even then, it would be in close line with the market rate.

  • @adityasethi9794
    @adityasethi9794 5 ปีที่แล้ว +1

    Well explained. Thanks!

  • @gabrielries3860
    @gabrielries3860 5 ปีที่แล้ว +6

    Great video but wouldn’t be simpler to follow the formula 1+EAR=(1+APR/k)^k?

    • @vishalsg
      @vishalsg ปีที่แล้ว

      At least could've explained those terms. It looks more complicated than the video.

  • @fiona.e1026
    @fiona.e1026 5 ปีที่แล้ว +1

    Thank u i finally understod it

  • @zenox3000
    @zenox3000 ปีที่แล้ว +1

    damn you are good at explaining, thank you so much

    • @Edspira
      @Edspira  ปีที่แล้ว

      I appreciate the kind words, thank you!

  • @kingofsmart350
    @kingofsmart350 7 ปีที่แล้ว +1

    Thanks. JUST KEEP GOING

  • @centurychallenger
    @centurychallenger 9 ปีที่แล้ว +5

    Thank you Sir

  • @mmsh7052
    @mmsh7052 5 ปีที่แล้ว +1

    Thank you so much for this

  • @sohanalamrasel
    @sohanalamrasel 9 ปีที่แล้ว +2

    Superb explanation!! 5 star

  • @GMinihisht
    @GMinihisht 7 ปีที่แล้ว +1

    Thank you very much

  • @LeMale96
    @LeMale96 8 ปีที่แล้ว +2

    Well explained good sir, thank you.

    • @Edspira
      @Edspira  8 ปีที่แล้ว +1

      No problem!

  • @lorenzosoechu-shing2384
    @lorenzosoechu-shing2384 5 ปีที่แล้ว +1

    Thanks, this was a big help!😌

  • @kalebteshome4212
    @kalebteshome4212 4 ปีที่แล้ว

    This is a very helpful video, thanks

  • @ZorgShip9
    @ZorgShip9 5 ปีที่แล้ว +1

    It sounds like you're John C Riley. I'm just picturing him giving me a finance lecture

  • @carlosgonzalez-mr3ic
    @carlosgonzalez-mr3ic 3 ปีที่แล้ว

    Dude friking great

  • @Clifffffffffford
    @Clifffffffffford 6 ปีที่แล้ว +1

    Thanks !

  • @AR25326
    @AR25326 5 หลายเดือนก่อน

    THANKYOU
    NEW SUBSCRIBER

    • @Edspira
      @Edspira  5 หลายเดือนก่อน

      Welcome aboard!

  • @grantreeves6738
    @grantreeves6738 9 ปีที่แล้ว +1

    Why not use 5 per cent for bank B instead of "x" so that a real comparison can be made. To me you fail to fully explain the difference is it a 12th of 5 per cent added each month or 5 per cent each month compounded?

    • @Dr_No
      @Dr_No 5 ปีที่แล้ว +1

      For compounding monthly, it is a 12th of 5% added each month. If the annual rate (in this case 5%) is compounded daily, then 365th of 5% is added each day.....if it is compounded semi-annually, it is 1/2 of 5% added every 6 months. Hope this helps.

  • @yagogarciaprieto2722
    @yagogarciaprieto2722 3 ปีที่แล้ว

    Really clear and good!!!!

  • @annaochola1053
    @annaochola1053 9 ปีที่แล้ว +1

    That was very helpful. Thank u

  • @mahmad7277
    @mahmad7277 7 ปีที่แล้ว +1

    very well explained. Thanks

    • @Edspira
      @Edspira  7 ปีที่แล้ว

      Thanks!

  • @haydn2097
    @haydn2097 2 ปีที่แล้ว

    good video

  • @karthicksowndharraj2402
    @karthicksowndharraj2402 4 ปีที่แล้ว

    Thanks much

  • @Danielle-zy7hf
    @Danielle-zy7hf 5 ปีที่แล้ว +1

    thanks for saving before my exam !!!!!

  • @joshuafancher3111
    @joshuafancher3111 6 ปีที่แล้ว +2

    thanks

    • @Edspira
      @Edspira  6 ปีที่แล้ว +1

      No problem!

  • @linkguy30
    @linkguy30 3 ปีที่แล้ว

    Tysm

  • @rob8482
    @rob8482 7 ปีที่แล้ว +1

    SWEET ! THX

  • @BlitzzGames
    @BlitzzGames 5 ปีที่แล้ว +1

    MASTER!

  • @nasser6045
    @nasser6045 2 ปีที่แล้ว

    is the stated rate the APR ?

  • @gilliantaylorr7854
    @gilliantaylorr7854 5 ปีที่แล้ว +1

    i mean i wish banks offered rates as good as they are in math examples.

  • @chiedzaivy1226
    @chiedzaivy1226 2 ปีที่แล้ว

    I'm failing to understand where the 1.05 came from 🥺 ...

  • @felixcat4346
    @felixcat4346 ปีที่แล้ว

    Every Bank in New York tells you both interest and yield you get both rates

  • @nathantaylormckenzie
    @nathantaylormckenzie 8 ปีที่แล้ว +3

    when some one tells me about EAR I think: hmmm self...I have two of those...and then I am dumbfounded to find out...It's the effective annual rate..... :) I need help

  • @ashok305
    @ashok305 6 ปีที่แล้ว +1

    typo alert...its not 1.0125.....its 0.0125 interest rate.....Thank u so much for this explanation

  • @KARAB1NAS
    @KARAB1NAS 8 ปีที่แล้ว

    the stated rate is expressed per annum??

    • @Dr_No
      @Dr_No 5 ปีที่แล้ว

      Yes, the stated rate is usually per annum, or "annually"

  • @daniloorbolato
    @daniloorbolato 7 ปีที่แล้ว +1

    Where is my pal Sal?

  • @BobiR-bl9fc
    @BobiR-bl9fc 7 ปีที่แล้ว +1

    I ve got it .........

    • @Edspira
      @Edspira  7 ปีที่แล้ว

      Gotta love that aha moment! Take Care.

  • @user-zq1lb3lx4m
    @user-zq1lb3lx4m 5 ปีที่แล้ว

    im gonna spend the additional 95 cents on a poppy so don cherry doesnt hate me

  • @invisiblefrog9075
    @invisiblefrog9075 6 ปีที่แล้ว

    This is dumb, what do you expect to do if the interest is compounded daily, do that 365 times. Anyone who just wants an equation for this, use this. ((1+interest rate/n)^n)-1. n stands for the amount of months that the interest rate is compounded

    • @Dr_No
      @Dr_No 5 ปีที่แล้ว

      If you use the 5% in the example, and assume this is compounded daily, then you would multiply the amount times .... [ 1 + (.05/365)] ^ 365 ......^ means to the power 354.

    • @Dr_No
      @Dr_No 5 ปีที่แล้ว

      If it was 5% compounded monthly, you would multiply the amount times ... [ 1 + (.05/12) ] ^ 12

    • @Dr_No
      @Dr_No 5 ปีที่แล้ว +1

      If it was 5% compounded semi-annually, you would multiply the amount times ...... [ 1 + (.05/2)] ^ 2

  • @MohamedAbdo-xs7bf
    @MohamedAbdo-xs7bf 4 ปีที่แล้ว

    Thanks for your effort, although, this person has to invest his money on drugs :D

  • @nxdiagxrcia
    @nxdiagxrcia ปีที่แล้ว

    I thought I just didn't understand finance , turns out I just needed a better explanation 🥲🤣 THANK YOU