For a particular currency, the interest rate is the price of money in that currency, that is, the cost of borrowing in that currency.

The interest rate is formed in the money market under the influence of supply and demand: the more those who want to borrow money, the higher it is; the more those who are willing to lend money, the lower it is.

State governments through Central Banks control the interest rate in the money markets, limiting the amount of money in circulation. The size of the interest rate affects the economic activity in the country. If the interest rate rises, and therefore loans become more expensive, then debt-financed projects become less attractive, as they must be more profitable to cover costs. In other words, high interest rates suppress economic activity and make it impossible to implement a number of projects. On the contrary, a decrease in interest contributes to the growth of economic activity, increasing the attractiveness of projects with debt financing.

Impact of interest rates on the global market

Most business globally is financed by loans of a similar nature. The "value" of these loans is determined by the respective interest rates. The higher the rate, the more profitable the business must have in order to cover the interest on the loan.

Essentially, the interest rate is the cost of doing business that affects every individual. The interest rates that consumers and homeowners pay on their credit cards and mortgages originate from money markets.

Interest rates determine what it costs an organization or individual to use borrowed funds over a certain period of time. The expression “time is money” means that as long as the borrower owes money, interest is charged on the principal amount of the loan.

The role of interest rates

Market participants are always looking for ways to increase profits. The key criterion for assessing the prospects of investments is the real rate of return on them. For the currency in which investments are made, this rate is determined as follows:

Real Rate of Return = Interest Rate - Apparent Inflation Rate

Money flows to countries with the highest real rates of income. Central banks sometimes raise interest rates to attract capital into the country. High rates attract capital, which allows us to hope for an increase in demand for the national currency and for an appreciation of the exchange rate. To obtain a high income, market participants must invest capital in the country and buy its national currency.

When the central bank raises interest rates, the real rates of income in the national economy rise, which attracts capital into the country. On the contrary, a decrease in interest rates entails an outflow of capital from the country. The inflow or outflow of capital strengthens or weakens the currency accordingly. Thus, by changing interest rates in the national money market, the Central Bank affects the exchange rate.

The interest rates of the money market are related to the rates of other sectors of the financial market, and the discount rate of the Central Bank, the rate on treasury bills, interbank rates on overnight loans ("day money") are the base for the entire system of interest rates.

In different countries, the interest rate of the Central Bank is called differently:

• - discount rate in the USA, in Germany, in Japan and in Switzerland
• - intervention course in France
• - bank rate in Canada
• - UK money market dealing rate
• - refinancing rate in Russia

Online sports betting is available to everyone today, to start playing for real money you just need to create an account in one of the bookmakers and replenish your gaming account in any convenient way. And if beginners have no problems registering on the bookmaker’s website, then depositing and withdrawing funds creates many questions.

In this article, we will consider all issues related to transactions in the online betting shop: payment methods, currencies of the gaming account and show you how to choose bookmakers that support Yandex.Money, WebMoney and Visa/MasterCard.

Payment methods in bookmakers

After successful registration in the online bookmaker, you need to log in to the site and enter your personal account, where there will be a section with financial transactions. It can be called differently - “cash desk”, “deposit / withdrawal of funds”, “payments”, etc., it is easy to find it.

By going to this section, the player will see the available ways to replenish the account and receive payments. Their number depends on the bookmaker, some provide up to 100 different payment systems. We will not consider everything, we will highlight only the main methods of depositing and withdrawing money.

Electronic payment systems

In the era of hype around bitcoin, you won’t surprise anyone with electronic money, such payment systems as WebMoney and Qiwi have firmly entered our lives and have become very convenient services for making payments on the Internet. They can also be used to make a deposit to a game account and bet on sports. The best bookmakers with WebMoney, Qiwi, Yandex.Money, Neteller and other electronic payment systems are presented in the bookmaker rating.

The best bookmakers with payments via Yandex Money and Webmoney

Mobile payments

Recently, mobile payments have become very popular - replenishment of an account in a bookmaker's office from a mobile phone via sms. Although most use this payment method as an additional one, when it is not possible to use the main one. There are mobile payments in almost all domestic online bookmakers.

Bank cards

The most affordable and common way to deposit money into a game account is bank cards, which everyone has today. In bc, this method is used by default, so you don’t need to look for a bookmaker with the withdrawal of money to the card, it is available in absolutely all bookmakers. To deposit or withdraw money, you need to enter data and confirm the operation, which will take no more than two minutes.

Currencies of the game account in bq: what should you know?

In legal Russian bookmakers, it is allowed to bet on sports in rubles, while other currencies are not available. In foreign offices, when registering, the player has the opportunity to choose the currency of the game account - from the dollar to the South African rand.

It is only important to know that the account currency cannot be changed in the future, so make your choice during registration so that there are no problems later. And there can be, in fact, only one problem, and its name is conversion. If the currency of the card/electronic wallet from which the deposit is made differs from the currency of the game account, then a certain amount will be charged for the conversion.

Let's say you registered a dollar account and chose Visa replenishment at the bookmaker's office, and your card is in rubles. In this case, currency conversion will be performed and you will lose a small percentage of the amount.

Ideally, if you have a card in rubles, then you also need to open a game account in rubles, a WebMoney wallet in dollars - choose the dollar account currency. However, sometimes players ignore the conversion, because it is more comfortable for them to bet in one currency or another, this should also be taken into account.

How to choose the right bookmaker?

The availability of a suitable method of depositing and withdrawing money is an important, but far from the most important criterion that should be followed when choosing a bookmaker. If you want to replenish your account with a credit card, you do not need to register at the first bookmaker that comes across, where such a method is present. Explore all MasterCard/Visa bookmakers, or at least a few, choosing the best option. Pay attention, first of all, to the reliability of the operator, then to the coefficients, line, painting, live, bonuses and the rest.

And finally, we note a template, but no less important detail: do not tell anyone the secret data of a bank card, passwords, and so on, even if the support service requires you to provide such information. In general, be careful and stay safe.

Proper money management will increase money

If you want to bet on sports for the sake of interest, getting new emotions and having a good time, then you should not fill your head with various information about strategies. But if you are registering with a bookmaker in order to win and earn money, then it is vital to devote time to the issue of money management.

Financial management strategies are money management systems in sports betting that, on the one hand, minimize risks, and on the other hand, allow you to make a profit in long-term betting, or at least increase the chances of ultimate success.

Simply put, these are useful tools with which you will regularly withdraw money to a card or electronic wallet, and not replenish weekly, counting losses. Successful bids!

To determine the amount of loan interest, use the indicator norms percent(interest rate), which is considered as the ratio of annual income to the loaned value to its absolute value.

The dynamics of the average rate of interest (average interest rate) is determined by the ratio of demand and supply of loan capital in the market. The level of interest rate for each particular loan also depends on many factors.

The interest rate can be classified according to various criteria.

The relative quantitative expression of the loan interest is the interest rate, and the absolute - percentage numbers (interest income)

Types of interest rates:

Based on inflation: nominal and real

Depending on the possibility of changes: fixed and floating

Depending on the calculation method: simple and complex

Depending on the cost of interbank resources: LIBOR; LIBID, MIBOR; CYBOR; MIBID; KIBID

Depending on the types and terms of loans:

Short-term, medium-term and long-term;

Deposit;

Discount;

mortgage;

Credit

Depending on the type of loan:

commercial

banking

consumer

Depending on the methods of calculation, the official rates of the NBU:

• rediscounting;

  refinancing

1. Distinguish real and nominal and effective interest rates.

Nominal interest rate - is the current market interest rate. Real rate - it is the inflation-adjusted rate of interest, that is, expressed in constant prices. It is the real rate that determines the decision-making on the expediency (or inexpediency) of investments.

I.Fischer defined the nominal interest rate as a function of the real rate of interest and the expected rate of inflation:

where I is the nominal or market interest rate

r - real percentage value

e is the rate of inflation.

Only in those cases when there is no increase in prices in the money market (e = 0), the real and nominal rates coincide.

Effective interest rate - the real profit receive from one invested monetary unit for the whole year.

2. Fixed and floating interest rates. If the rate remains constant throughout the term of the loan, then it is called a fixed rate.

floating interest rates(changing during the term of the loan agreement) are used not only in the national, but also in the international loan capital market. The floating interest rate varies depending on fluctuations in interest rates in the loan capital market. Interest rates in Ukraine are currently quite high. This is due to a number of factors that affect their value.

Expansion of demand for loans in order to obtain additional means of payment to pay off debt obligations. Uncertainty about the economic outlook reduces interest in raising funds on a long-term basis (by issuing shares and bonds) and increases demand for short-term loans;

Monetary - credit policy of the NBU, aimed at curbing the growth of the money supply, which means a reduction in the supply of loan capital;

The state budget deficit, to cover which the government and local authorities, turning to the loan capital market, increase the demand for it.

3. According to the calculation method, interest rates are simple and complex. Simple interest is accrued on the same amount during the year, compound - taking into account the amount of accrued interest for the previous period. The accrued payment amount (S) for calculating simple interest consists of the sum of two elements - the amount of the original debt (P) and the amount of interest (I).

Formula for calculating simple interest:

S=R+ I =R + Rni =R(1+in),

where i is the interest rate (in fractions of units)

n is the number of full years (ni\12 is the number of months; ni| 360/365 is the number of days);

(1 + ni) - build-up factor Formula for calculating compound interest:

S= P +I= P(1 +i)",

where (1 + i)" is the build-up factor (interest capitalization factor).

In world banking practice, the following indicators of loan days are used when calculating interest:

The approximate number of days of each month (the duration of each month is assumed to be 30 days);

Exact number of days of the month (28,29, 30, 31 days).

The time base for interest calculation is determined as follows:

Exact interest: based on the actual length of the year - 365 or 366 days;

Ordinary interest: approximate interest, based on the length of the year - 360 days.

Depending on the use of an approximate or exact period for calculating interest, German, French and English methods are distinguished.

English: exact number of days in each month and exact percentages

French: exact number of days in each month and ordinary interest

German: p approximate number of days in a month and ordinary interest

Depending on the type and term of loans.

The interest rate depends on the term of the loan. When determining the interest rate, first of all, the term of the loan is taken into account. This is due to the fact that an increase in the term of using a loan increases the risk of its non-repayment due to changes in the external environment and the financial condition of the borrower, the risk of lost profits as a result of fluctuations in interest rates in the credit market. In this regard, interest rates are differentiated by short-term (up to one year), medium-term (from 1 year to 5 years), long-term (over 5 years) loans.

The interest rate depends on the size of the loans. This is explained by the fact that with large loan amounts, the risk increases, the value of which is estimated by the size of the loss of the lender due to the insolvency of the borrower. The probability of simultaneous bankruptcy of several borrowers is much less than one of them. Consequently, the risk of the lender is reduced in the case of loans to several borrowers. Servicing small borrowers results in relatively high costs for the bank. In this regard, depending on the size of loans, the interest rate is differentiated by small, medium and large loans.

The interest rate depends on the security of the loan. Allocate the interest rate on an unsecured (blank) loan. These loans are expensive because they are associated with increased risk. Lower is the interest rate on loans with the following collateral: "promissory note" commodity, for accounts receivable, for securities.

The purpose of using the loan is different, depending on it, the interest rate will also be different. Loans issued to eliminate financial difficulties, for the implementation of investment projects, etc. have an increased risk.

The interest rate varies depending on the type of loan(commercial, banking, state, consumer, etc.), as well as from the borrower (credit for commercial and industrial companies, agricultural, public utilities, individual borrowers).

Official interest rate may be:

- onrediscounting ( rediscount of securities, including bills of exchange);

- onrefinancing (crediting of banking institutions by the Central Bank);

- accounting NBU rate. The NBU discount rate is a monetary instrument, with the help of which it establishes a benchmark for monetary market entities to determine the cost of attracted and placed funds for a certain period.

Depending on the cost of interbank resources. In connection with the development of interbank credit, interbank lending interest rates have become widespread. In world practice, London's LIBOR can serve as an example of the interbank rate, which is used as a base when calculating the cost of individual international transactions. As a rule, a certain premium (margin) is added to the base LIBOR rate, which depends on the type of transaction, the financial position of the borrower, and the situation on the loan capital market.

In Ukraine, the interbank rate is formed under the influence of supply and demand in the interbank market and increases depending on the state of the credit resources market. Thus, since the middle of 1994, the KIBOR (KIVOR) and KIBID (KIBID) rates have been used as indicators of the interbank resources market.

KIBOR (from English - KievInterBankOfferedRate) - offer for sale) represents the average rate in the interbank market for the placement of loans.

KIBID (from the English KievInterBankOfferedBid - an offer to buy) is the average announced rate for attracting loans. At this rate, banks are ready to buy an interbank loan.

The foundation of the interest rate policy is the monetary policy of the state, pursued by the central bank (NBU in Ukraine). It focuses on the state of the economy and the free credit market. However, commercial bank rates are affected by factors not directly related to central bank policy. In other words, there is a multifactorial process in which all components are in close interaction.

Monetary policy is one of the leading factors in changing interest rates in the credit market

By influencing the general terms of the loan offer, the Central banks of all countries with their policies have a very significant impact on the level of the market price of credit resources - the interest rate.

All actions of state regulatory bodies, and in particular, central banks that affect finance and money circulation, are important factors for exchange rates. The price of a currency is determined primarily by the supply and demand associated with that currency on the international market. Therefore, the exchange rates of major currencies are created by the market, but central banks have a range of tools through which they can significantly affect exchange rates. Central banks use these tools based on the goals of their financial policy (the main of which is the stability of the national currency) and the specific situation that is determined by the state of the economy, the country's competitive position in the world market and political factors. Therefore, the markets are always very closely watching not only the economy, but also the financial statistics of the main trading countries, trying to predict the actions of central banks based on them.

Monetary Statistics Indicators

The amount of money in circulation (Money Supply) is one of the essential factors that shape the exchange rate. An excess of one currency will create an increased supply of it in the international foreign exchange market and cause a decrease in its exchange rate in relation to other currencies. Accordingly, a shortage of currency in the presence of demand for it will lead to an increase in the exchange rate, characterizing the composition of money (the structure of the money supply). The monetary aggregates themselves are defined somewhat differently in different countries, but their general meaning is quite similar.

M1 - cash in circulation outside banks, traveler's checks, demand deposits, other checkable deposits;
M2 – M1 + non-checkable savings deposits, time deposits with banks, overnight repos, overnight US dollar deposits, mutual fund accounts;
M3 - M2 + short-term government bonds, REPO transactions, Eurodollar deposits of US residents in foreign branches of US banks.

US monetary aggregate data is released weekly, usually on a Thursday.

The impact of data on monetary aggregates on currency cycles is assessed primarily through their relationship with the stages of economic cycles. The behavior of various monetary aggregates in the economic cycle is quite similar: they all show maximum growth rates before the start of a recession and growth minima at the end of a recession. For this reason, aggregate M2, for example, is included in the composite index of leading indicators. All aggregates experience the greatest growth during the recovery stage; M2, on average, has one growth rate in the recession stage and in the growth stage.

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Interest rates

None of the indicators of economics and finance is as important for tracking the dynamics of foreign exchange markets as interest rates. The Interest Rate Differential, that is, the difference in interest rates for two currencies, is the main factor that directly determines the relative attractiveness of a pair of currencies, and, consequently, the possible demand for each of them. There are many types of interest rates in the money market of each country: the rate at which commercial banks borrow money from the central bank (official interest rate - Official Interest Rate), the rates at which banks borrow money from each other (interbank borrowing rates - Interbank Offered Rate ), interest rates that determine the yield on government securities (Government Bonds Yields), interest rates at which banks issue loans to their customers (Lending Rates), interest rates at which commercial banks raise money in deposits (Deposit Rates) All these rates closely interconnected and ultimately determined by the official interest rate set by the central bank

Thanks to the transparency of the boundaries for financial capital, an investor today can choose the most profitable option for investing his money. Therefore, if a Japanese investor has funds in trillions of yen and can receive income on them in the form of interest on a deposit in a Japanese bank in the amount of, say, 0 1% per annum, then this investor, of course, will prefer a dollar deposit at 5.5% per annum in an American bank, or he will buy American government bonds, which also pay high returns, and are guaranteed

The higher the interest rate for this currency compared to other currencies (large interest differential), the more foreign investors will be willing to buy this currency in order to deposit funds at a high interest rate. And since interest rates are always closely linked, high banking market rates mean high government bond rates as well as high yields on riskier corporate bonds. In a word, high interest rates make this currency attractive as an investment tool, which means that the demand for it in the international currency market is increasing, and the exchange rate of this currency is growing.

Central bank interest rates

Market interest rates on loans, deposits, etc. do not arise by themselves in the market element. In each country, credit conditions and interest rates in the money market are regulated by the central bank.

The discount rate (discount rate) characterizes the conditions under which the central bank (CB) provides funds to commercial banks. (1 - d / 100) x S, and he will return the amount S to the central bank. Usually the discount rate is set as a percentage per annum.

Interest rates (interest rates) of interbank borrowing in many countries are the main policy instrument of central banks. They go by different names, but their general meaning is that at such interest rates, commercial banks borrow funds from each other for a short time to adjust their balance sheets Difference interest rate from the discount rate lies in the method of calculating the amounts if the bank borrowed the amount S from another bank at r percent, then it will return the amount (1 + r / 100) x S

Officially regulated interbank borrowing rates are the determining factor for all other money market rates, they determine the rates on government debt securities, yield levels on all other financial instruments, interest on loans to bank customers

The main factor that directly and directly determines the exchange rate of one currency against another is the difference in interest rates acting on the two currencies (Interest Rate Differential).

For example, let a bank client have 1 million euros, which are released from the company's turnover for a period of 3 months and can be placed on deposit to generate income. In this case, suppose that the interest rates for the euro are 2.62 percent per annum, and higher rates apply for the dollar at 5 28 percent Then, by converting euros into dollars, you can get more income Let's say today's euro exchange rate is EUR = $1,0400. If you place the amount of 1 million euros in a deposit, then in 3 months the amount will be received.

If you convert 1 million euros into dollars at the EUR rate and place them in a dollar deposit, then the amount will be received:

If the euro exchange rate for these 3 months remained the same EUR = 1.0400$, then the result of the second option in euro would be 1.0132, and the difference between the amount received from converting the dollars received back into euro and the result obtained in the first option would be 1.0132 – 1.00655 = 0.00665 million = 6.650 euros, would be the benefit from the conversion of euros into dollars and the dollar deposit transaction, received from the difference in interest rates for the dollar and for the euro.

Business Optimism Index

In developed countries, regularly published indexes of business optimism, calculated on the basis of a survey on the state of the economy of leading businessmen - heads of large corporations, are widely distributed.

In the US, this is the NAPM (National Association of Purchasing Management) index, in the UK, the CVI (Corporation of British) index.

Recently, Russia has also been calculating and regularly publishing indices of business optimism of Russian entrepreneurs.

An increase in this index increases confidence in the national economy and contributes to the growth of the exchange rate.

Business Activity Indices

Extremely popular in recent years in economic statistics are indicators based on the method of constructing the so-called diffusion indices. Indexes of this kind, which by their nature are indicators of the business optimism of business participants, are regularly published (under the names PMI) in the USA, England and Germany, where they are created by the relevant business associations. They are used both to assess the direction of public opinion and to measure the dynamics of objective indicators. . In Japan, a similar TANKAN index has been adopted by the Central Bank of Japan itself as a tool for analyzing the dynamics of economic processes for making decisions in the field of monetary policy.

Diffusion indices, unlike many other indicators of socio-economic statistics, are purely subjective indicators. They do not measure the volume of output, the number of orders, income, etc., but are only a reflection of how participants in economic processes perceive ongoing changes - for the better. they (in their opinion) or they lead to deterioration. Despite such subjectivity, or rather, precisely because of it, these indices have extremely strong predictive properties, they are leading indicators that are highly correlated with the main parameters of economic cycles.

a) trade negotiations

Trade negotiations are an important part of the economic policy of any country. In particular, the ratio of imports and exports provides such an important indicator of economic development as the trade deficit. For the US, the trade deficit has been a major problem over the past few years, playing a significant role in the fall of the US dollar against major currencies. The result of trade negotiations finds an immediate response in the market, sometimes more than significant.

b) meetings of central banks

The main task of central banks is to regulate the internal economic life of the country. In addition, the adjustment of the internal and external value of the currency is also included in his duties. Therefore, any meeting of the central bank (or rather, its working committee) attracts the close attention of foreign exchange market participants. One of the main means of stimulating or, conversely, slowing down the growth of the economy, attracting foreign capital, the attractiveness of government bonds and, as a result, the value of the currency, is the regulation of interest rates.

The most important are the actions of the US Federal Reserve System, which have a significant impact on the US stock market and on global financial markets in general, so participants are closely monitoring changes in interest rates and FOMC (Federal Open Market Committee) operations in the government securities market and statements by representatives FRS, in particular, its head A. Greenspan.

Scheduled meetings of the Fed are held eight times a year (once every one and a half months) At the meeting, the economic situation in the country is considered and, based on the analysis, the further monetary policy of the country is determined, policy documents are adopted and the level of the credit interest rate for the sale of federal funds (Federal Funds Rate) is determined and the value of the discount interest rate (Discount Rate). The final minutes of the meeting (Minutes of the FOMC) are published a few days later.

c) meetings of the G8, economic and trade unions

One of the tasks of the G8 is to regulate the world economy and, in particular, the specific situation in the world currency market. There is a certain agreement between the members of the G8 on this matter - the SWAP Agreement. The result of the meeting of the G8 countries may be the decision to conduct joint intervention in the world currency market by several central banks or other measures to limit or, conversely, stimulate the growth in the value of a particular currency .

Meetings of trade unions that regulate trade relations between countries or determine the policy of a particular region can also have a fairly strong impact on a particular currency. The appeal of the US and Japan to the WTO (the World Trade Organization, established in January 1994), after the unsuccessful end of the next round of trade negotiations, left the yen practically without movement for almost a whole week. of the world economy and distributing loans, do not have a direct impact on currencies, although they may cause a certain response in the market. Most likely, in the present situation, one can count on determining a long-term strategy for the development of the market as a whole, rather than an immediate reaction.

d) speeches by heads of government, heads of central banks, prominent economists on the situation on the market

This is one of the factors that, in most cases, finds an immediate response in the market. The speech of the head of the Swiss National Bank, Lumiere, about Switzerland's disinterest in a strong native currency on September 29, 1995, led to a jump in the Swiss franc from 1,400 to 1,480 within a few minutes, and further to level of 1 1580 in the next hour Another example is the speech of the prominent economist Bergstein, which, together with unexpected figures from the deteriorating US trade balance and unfulfilled expectations about the additional budget of Japan, led to a catastrophic collapse of the yen in less than two days from 104.55 to 97 15 , nullifying a two-week effort by the Central Bank of Japan and the US Federal Reserve. Quite often, especially under certain conditions, the speech of a person can not only greatly affect the behavior of the currency, but also radically change the situation on the market.

Conclusion

Fundamental factors usually always have the expected impact, however, a trader should be careful not to take any of these factors as a 100% guarantee of a corresponding change in the exchange rate.

Several important additional points affecting the exchange rate.

Surely everyone who has ever taken a loan or become a bank depositor, first came across the concept of "bank interest rate":

The interest rate is the amount, expressed as a percentage, which is set by the bank for the use of a loan and paid for a certain period - a year, a quarter or a month.

• If the money is deposited in a current bank account or deposit, the depositor is the bank's creditor and the bank itself is the borrower.
• If the client borrows money from the bank (takes a loan), then the bank is now the lender, and the client is the borrower.

Knowing these simple truths will save you from the complexes that banks inspire in the population, explaining to them many kilometers of formulas for calculating interest with Newton's binomials, factorials, complex roots, powers and other mathematical crap complexity.

The interest rate determines the price of money

In either of these two cases, the interest rate has a valuing monetary dimension: what will be the savings of the depositor or the bank in a month, a year or several years.

The interest rate on depositors' deposits is usually lower than the rate on bank loans. This is the main income of banking and financial institutions - to take money at a lower price and dispose of it, re-borrowing at a higher one.

For depositors, a deposit is mainly a way to save money, not earn money, so deposit rates are now low, and in some banks in Europe they are even negative.

The base interest rate is the lowest loan interest available to large trusted companies and clients. The BPS is usually set by central banks.

Historical note on rates

The historical range of rates is impressive:

• In Germany, for example, the base interest rate fluctuated between 90% and 2% between 1920 and 2000.
• In the UK - 0.5 - 15% in 1989 - 2009.
• In the US, the US Federal Reserve rate in 1954 - 2008 varied between 19% and 0.25%.
• In Zimbabwe, during the hyperinflationary period of 2007, the lending rate reached 800%.

Types of bets

Fixed and floating rates

Interest rates are:

• Fixed - unchanged for a certain period of time.
• Floating - changeable and periodically reviewed by the bank, depending on some indicators.

So, the classic indicator is LIBOR - the average rate of the London Interbank Credit Exchange.

Many banks determine the floating rate by the formula: LIBOR + n, where n is the fixed rate of a particular bank.

Russian banks can rely on an independent indicative rate, such as the MosPrime Rate.

In the growing market of loan rates, it is more profitable for a borrower to take a loan at a fixed interest rate.

By the time of payment, bets are:

• decursive - paid at the end along with the repayment of the loan;
• antisipative - paid in advance when granting a loan.

Decursive rates are beneficial for borrowers, and antisipative rates are beneficial for lenders, but banks usually act in their own interests:

• interest on deposits is calculated decursively,
• credit - antisipative: when issuing a loan, the total interest is immediately determined, which is then divided by the number of periods (usually months).

Decursive and antisipative methods are used when calculating simple and compound interest, when the initial amount of capital changes in each reporting period.

• The decursive method is convenient to use with floating rates.
• The antisipative method is convenient during periods of instability as a guarantor of the payment of compound interest.

The decursive rate is also called the loan interest, since it determines the ratio of the income received (interest) to the initial amount of money.

How to calculate the loan interest and the amount of buildup

The formula for determining the loan interest:

i = I/P (1), where:

• i (income) - loan interest;
• I - the sum of all interest accrued for the reporting period;
• P - initial monetary amount (present value).

The amount of growth F (future value) is determined by the formula:

F = P + i*n*P = P*(1 + i*n). (2)

Here n is the number of billing periods.

The ratio F/P is the growth factor k n .

k n = 1 + i*n. (3)

Calculation of the amount of extensionF is called compounding.

Compounding on the calculation example

1. We will compound a bank loan in the amount of 1 million rubles, issued at 12% per annum (simple rate), for a period of 10 years according to the formula (2)

F \u003d 1,000,000 * (1 + 0.12 * 10) \u003d 2,200,000 rubles.

The initial amount of money issued by the bank on a long-term ten-year loan, often used in mortgages, increased by 1,200,000 rubles, that is, more than doubled.

1. You can also calculate the amount of growth for a short period (less than a year). In this case, the definition formula F (2) is transformed:

F = P * (1 + i * d/K). (4)

• d - the number of calendar days for which the loan was taken;
• K is the number of days in a year, i.e. 365 or 366.

Let us calculate the accrued amount of a loan in the amount of 50,000 rubles issued by an MFO at the annual simple rate of 15% specified in the agreement for a period of 91 days.

Inserting the values ​​into formula (4), we obtain:

F \u003d 50,000 * (1 + 0.15 * 91/365) \u003d 51,870 rubles.

Often, banks and MFIs require the return of amounts greater than the calculated ones - this means that additional hidden interest was calculated in the form of various commissions. Before concluding an agreement, you should carefully read all its clauses in search of illegal ways to increase capital.

Discounting

The reverse operation - the calculation of the initial amount P by the accrued F - is called discounting.

Discounting is calculated according to the formula:

P = F/ (1 + i*n). (5)

Let's calculate according to the formula (5):

P \u003d 100,000 / (1 + 0.1 * 3) \u003d 76,923 rubles.

Floating rate settlements

If the rate is floating, then the accumulated amount is calculated by summing up the rates for each period of their change, and the formula is converted into some kind of abstract formula:

F = P *(1 + ∑(1…N) n*i) (6), where:

• n is a period from one to N;
• i - variable rate;
• ∑(1…N) is the sum of products n*i for all calculation periods.

It looks scary at first glance, but how this happens is very easy to understand by the example:

We use formula (6) for calculation:

F = 500,000 *(1 + 0.11 + 0.5 (0.125 + 0.14 + 0.155 + 0.17)) = 500,000 * 1.405 = 702,500 rubles.

Pay attention to the fact that the growth factor k, calculated at a fixed percentage by formula (3), at a floating percentage is determined by the expression in brackets of formula (6):

K = 1 + ∑(1…N) n*i. (7)

In this example, its value is 1.405.

Compound interest calculations

This calculation method in the banking sector is used when calculating interest on long-term deposits, when interest is calculated on the amount accrued by previous interest.

The formula for calculating compound interest is shown in the figure below.

Rate and inflation

The interest rate can be nominal and real:

• Nominal - set by the bank.
• Real - adjusted for inflation.

The real rate i real is less than the nominal rate i nom by the inflation rate π.

i real \u003d i nom - π.

This formula is usually used when inflation is low. With a large inflation level, calculations are made using the more complex Fisher formula:

i real \u003d (i nom - π) / (1 + π).

The real value of money

To determine the real value of money, taking into account inflation over time, use the formula:

R= N/(1+i)ª.

R is the real value of money;

N is the nominal value;

i - inflation rate;

a is the number of periods (years, months, etc.).

Banks usually increase the interest rate during periods of high inflation, laying its growth in the nominal rate. Such a step, in addition to fighting the fall in the price of money, gives them the opportunity to raise the interest rate on deposits so as not to lose depositors.

Financial illiteracy of the population is beneficial to bankers

Sometimes lending rates, especially fast loans, are contrary to common sense and are a veiled scam. Therefore, everyone who wants to take a loan should have an understanding of what bank interest is and how to calculate the amount of the increase.

Taking advantage of the financial illiteracy of the population, banks today offer such intricate and complex calculation formulas that an engineer or programmer's calculator requires. Meanwhile, it is quite simple to calculate the total amount of loan payments (it is also the amount of the increase), as can be seen from the examples, on a regular calculator and even on a piece of paper. It can be calculated according to different formulas for payments on the body of the loan and on interest, but the deviations between your final calculations and bank ones should still not be too large. Moreover, here are formulas for calculating simple rather than compound interest, which does not contradict the principles of annuity payments used today in lending.

Banks today practically do not use a differentiated method of repaying a loan, in which the remaining amount of the debt, and not the initial amount, is taken into account when calculating interest. This is allegedly motivated by “concern for customers”: why, they say, should they strain their brains and make complex calculations every month? Thus, it turns out that our lending is one of the most unprofitable in the world.