Calculation of Interests and Annuities
Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Accounting and Financial Management for Bankers — JAIIB.
One-liners from this chapter
Free sample — 8 of 49 rapid-fire Q&A cards.
Annually — Effective Formula / Compounding Periods per Year (m)?
Effective Formula: A = P (1 + r/100)^n; Compounding Periods per Year (m): 1
Half-Yearly — Effective Formula / Compounding Periods per Year (m)?
Effective Formula: A = P (1 + r/200)^(2n); Compounding Periods per Year (m): 2
Quarterly — Effective Formula / Compounding Periods per Year (m)?
Effective Formula: A = P (1 + r/400)^(4n); Compounding Periods per Year (m): 4
Monthly — Effective Formula / Compounding Periods per Year (m)?
Effective Formula: A = P (1 + r/1200)^(12n); Compounding Periods per Year (m): 12
Daily — Effective Formula / Compounding Periods per Year (m)?
Effective Formula: A = P (1 + r/36500)^(365n); Compounding Periods per Year (m): 365
What is Rule of 72?
is a quick mental-math shortcut to estimate how many years a sum will take to double under annual compounding at a given rate.
Rate behaviour during loan tenure — Fixed Rate / Floating Rate (Variable)?
Fixed Rate: Stays constant for the entire tenure; Floating Rate (Variable): Resets periodically with the benchmark
Benchmark linkage — Fixed Rate / Floating Rate (Variable)?
Fixed Rate: None — rate is locked at sanction; Floating Rate (Variable): Linked to Repo Rate (EBLR), MCLR, base rate, or other benchmark
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