Capital Recovery Factor – Meaning, Formula, and Example
Capital Recovery Factor (or CRF) is the ratio that helps to find the present values of a series of equal payments. The equal payments… Read Article
Time Value of Money
LIBOR vs SOFR – Meaning, Need, and Differences
LIBOR (London Interbank Offered Rate) is a benchmark rate that serves as the basis for calculating the interest rate for many types of financial… Read Article
Secured Overnight Financing Rate – Meaning, How it Works, Pros, Cons, and Challenges
What is SOFR?The commonly used abbreviation for Secured Overnight Financing Rate is SOFR. As the word implies, it is an overnight lending rate. In… Read Article
Implicit Interest Rate – Meaning, Calculation, Use and Example
What is an Implicit Interest Rate?An implicit interest rate is when the rate of interest is not clearly mentioned on the loan document. The… Read Article
Real Interest Rate
What do we mean by the Real Interest Rate?A borrower of funds has to pay interest at a certain rate to the lender. Also,… Read Article
Nominal Interest Rate
What do we Mean by Nominal Interest Rate?Interest rate is the rate at which a lender charges the interest to a borrower for a… Read Article
Perpetuity
Meaning of PerpetuityPerpetuity is a never-ending stream of cash flows from an investment in the field of corporate finance. Such cash flows do not… Read Article
Compounding vs Discounting – All You Need to Know
Time Value of Money is an important financial concept and primarily refers to the value of money at different points in time. Two methods… Read Article
Add-on Interest – Meaning, Importance, Calculation, and More
As we know, there are several methods to calculate interest. And Add-on Interest is one of these methods to calculate the interest on a… Read Article
Importance of Time Value of Money
Time value of money (TVM) is the most fundamental and important concept in finance. This concept basically means that the money you have at… Read Article
Ordinary Annuity vs Annuity Due
An annuity is essentially a series of cash flows at regular intervals during the life of the annuity. It is a cash inflow for… Read Article