I hope you can still answer my question. On the interest rate on the euro which is 6.5%, I noticed that you convert it to decimal and multiplied it to the euro 88, 495.58. my question is how it becomes 1.065 from 6.5%? should it be 0.065 when converting 6.5% to decimal? Because there is a huge difference in the answer. when I use 0.065 to multiply the euro it was only 5,752.21 euros and that means the answer for the rate of return would be negative. Also, what would be the interpretation if the answer for the rate of return is negative?
Lets say 88496 is the principal amount that we want to deposit at the interest rate of 6.5%. so first calculate interest amount that would be 88496*.065 ...what ever interest amount u get add it to 88496. This will give u the total amount that u will get after earning interest including principal amount. Using 1.065 give u a short cut and instead of following 2 step procedure u directly get the principal plus interest amount
Sir G good lecture
sir i need more worked examples on covered interest arbitrage especially on bid and ask question
I hope you can still answer my question. On the interest rate on the euro which is 6.5%, I noticed that you convert it to decimal and multiplied it to the euro 88, 495.58. my question is how it becomes 1.065 from 6.5%? should it be 0.065 when converting 6.5% to decimal?
Because there is a huge difference in the answer. when I use 0.065 to multiply the euro it was only 5,752.21 euros and that means the answer for the rate of return would be negative.
Also, what would be the interpretation if the answer for the rate of return is negative?
What time period of the video u r refering to
@@tanveerahmad7791 4:03
Lets say 88496 is the principal amount that we want to deposit at the interest rate of 6.5%. so first calculate interest amount that would be 88496*.065 ...what ever interest amount u get add it to 88496. This will give u the total amount that u will get after earning interest including principal amount. Using 1.065 give u a short cut and instead of following 2 step procedure u directly get the principal plus interest amount