Home  Journals  Finance and Credit  18(498) - 2012 May

Operating and homogeneous effective interest rates as the measures of the credit cost credit

Available online: 28 April 2012

Subject Heading: Economic theory

JEL Classification: 

In the article two new types of the effective interest rate of credit (EPS) for evaluating the cost of credit are proposed. Operating (EPS) is based on the straight comparison of pay for credit the service lives given and value of the remainders of basic debt summary within entire period of credit. Homogeneous (EPS) is determined as a result the comparisons of the discounted summary payments of borrower with the commission and the same according to the diagram of the maintenance the debt of credit without the commission. The comparative analysis of investment, homogeneous and operating (EPS) is given. The connection of internal standard unit of income (IRR) with operating (EPS), which makes it possible to give new economic interpretation IRR is established.

Keywords: calculation, credit, creditor, borrower, profitableness, effective interest rate, discounting.

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ISSN 2311-8709 (Online)
ISSN 2071-4688 (Print)

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