# Questions tagged [interest]

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### Does “Interest Costs during Construction” impact NAV or IRR of a project?

Does “Interest Costs during Construction” impact NPV or IRR of a project? Companies often, based on accounting principles, capitalize Interest Costs during construction (i.e. they added fixed asset by ...
64 views

### What are “local” and “foreign” interest rate in this formula? [closed]

I found this formula to find fair value of a forex pair: FV = Spot × e(local interest rate−foreign interest rate) × T Taken for example AUDUSD, Spot is AUD per USD. T is the time to maturity of ...
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### How to solve for effective interest rate of a government bond on HP 10bll+ financial calculator? [closed]

Price of bond = 100.44 Nominal coupon interest rate (compounded annually) = 1.5% Duration: 10 years Face value (what you get back after 10 years, may be poor translation): 100 Spent hours now trying ...
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### capital recovery factor isolate interest

in the capital recovery factor formula: CRF = i(1+i)^n / ((1+i)^n)-1 If we know CRF and n, is it possible to isolate the i? right now I am using excel to get ...
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### Central bank interest rates: are they quoted annualized?

After a little research on interest rates of different countries I figured out that they are more complicated than I thought and the meaning of them varies country by country. For example, the U.S. ...
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### Immunization: Whats the best way to hedge my short interest rate exposure?

What's the best way to hedge a portfolio against a rise in rates? Portfolio: long bonds different maturities. a) parallel shift b) convex shift (short and long term rise more than mid term) How is ...
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### Force of Interest Compounding at Annual Rate i

I'm working through some actuarial practice and am lost as to what's going on with the differentiation here (it's been a while since I've had calc): Derive an expression for $\delta_t$ if ...
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### What interest rate should I use for testing the covered interest parity?

I am doing an empirical test of the CIP from the recent financial crisis between Canada and the United States. I am using 1,2,3,6,12 month forwards (monthly data). What interest rates should I use? I ...
150 views

### Compound Interest Calculation (Years + Months)

My question is with regards to the calculation of "Compound Interest". I have the formula below where I would get an answer to the total value of the investment over a period of "years". $A$ = Future ...
48 views

### Formal Proof of Immunization Techniqu

Please correct me if I am wrong in understanding the Immunisation Technique behind bond interest rate risk management. It says that any change in interest rate can be neutralised by reinvesting the ...
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### “Equivalent” data sets despite different numbers

Are the historical data sets of short term treasury bill rates considered the same as the historical data sets of savings account interest rates because by definition they are both risk free rates of ...
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### How often do banks update forward points?

My understanding is that forward rates are calculated by comparing interbank interest rates of the 2 currencies for a currency pair, with the points being the difference between spot and the forward ...
1k views

### What is lagged interest rate?

I am trying to reproduce a plot in "Statistics and Data engineering for Financial Engineering" by D. Ruppert. The author uses the risk free returns data available in the Ecdat package in R. ...