A Visual Guide to Simple, Compound and Continuous Interest Rates
Interest rates are confusing, despite their ubiquity. This post takes an in-depth look at why interest rates behave as they do.
Understanding these concepts will help understand finance (mortgages & savings rates), along with the omnipresent e and natural logarithm. Here’s our cheatsheet:
Term
Return
Description & Usage
Simple
Fixed, non-growing return (bond coupons)
[tex]P …
Demystifying the Natural Logarithm (ln)
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