Add on Rate Calculator

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✖Year is 12 months used by companies and governments for accounting purposes and preparing financial statements.ⓘ Year [YR]			+10% -10%
✖Days refers to the number of days between settlement and maturity.ⓘ Days [d]			+10% -10%
✖Amount Paid at Maturity Including Interest refers to the total sum that an investor receives when a financial instrument reaches its maturity date.ⓘ Amount Paid at Maturity Including Interest [APMI]			+10% -10%
✖Present Value of Money Market Instrument refers to the current worth of a financial instrument that will pay a specified amount at maturity, discounted at a given interest rate.ⓘ Present Value of Money Market Instrument [PV]			+10% -10%

✖Add on Rate refers to a method of calculating interest on a loan or investment where the interest is computed on the entire principal amount for the entire loan term, and then added to the principal.ⓘ Add on Rate [AOR]

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Add on Rate Solution

STEP 0: Pre-Calculation Summary

Formula Used

Add on Rate = ((Year/Days)*((Amount Paid at Maturity Including Interest)-Present Value of Money Market Instrument)/(Amount Paid at Maturity Including Interest))
AOR = ((YR/d)*((APMI)-PV)/(APMI))
This formula uses 5 Variables

Variables Used

Add on Rate - Add on Rate refers to a method of calculating interest on a loan or investment where the interest is computed on the entire principal amount for the entire loan term, and then added to the principal.
Year - Year is 12 months used by companies and governments for accounting purposes and preparing financial statements.
Days - Days refers to the number of days between settlement and maturity.
Amount Paid at Maturity Including Interest - Amount Paid at Maturity Including Interest refers to the total sum that an investor receives when a financial instrument reaches its maturity date.
Present Value of Money Market Instrument - Present Value of Money Market Instrument refers to the current worth of a financial instrument that will pay a specified amount at maturity, discounted at a given interest rate.

STEP 1: Convert Input(s) to Base Unit

Year: 7 --> No Conversion Required
Days: 15 --> No Conversion Required
Amount Paid at Maturity Including Interest: 210 --> No Conversion Required
Present Value of Money Market Instrument: 35 --> No Conversion Required

STEP 2: Evaluate Formula

Substituting Input Values in Formula

AOR = ((YR/d)*((APMI)-PV)/(APMI)) --> ((7/15)*((210)-35)/(210))

Evaluating ... ...

AOR = 0.388888888888889

STEP 3: Convert Result to Output's Unit

0.388888888888889 --> No Conversion Required

FINAL ANSWER

0.388888888888889 ≈ 0.388889 <-- Add on Rate

(Calculation completed in 00.004 seconds)

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< Strategic Financial Management Calculators

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Add on Rate Formula

LaTeX Go

Add on Rate = ((Year/Days)*((Amount Paid at Maturity Including Interest)-Present Value of Money Market Instrument)/(Amount Paid at Maturity Including Interest))
AOR = ((YR/d)*((APMI)-PV)/(APMI))

What is Add on Rate?

Add on Rate in finance provides a simple way to calculate the total interest on a loan by adding the interest to the principal and then determining periodic payments. While easy to understand, it often results in a higher effective interest rate compared to other methods, as interest is computed on the entire principal for the duration of the loan. Understanding how the add-on rate works is crucial for borrowers to make informed financial decisions. The add-on rate can result in a higher effective interest rate compared to other methods, such as amortized loans because interest is calculated on the full principal for the entire term.

How to Calculate Add on Rate?

Add on Rate calculator uses Add on Rate = ((Year/Days)*((Amount Paid at Maturity Including Interest)-Present Value of Money Market Instrument)/(Amount Paid at Maturity Including Interest)) to calculate the Add on Rate, Add on Rate calculates interest based on the initial principal for the full term of the loan or investment, rather than on the remaining balance as it reduces over time. Add on Rate is denoted by AOR symbol.

How to calculate Add on Rate using this online calculator? To use this online calculator for Add on Rate, enter Year (YR), Days (d), Amount Paid at Maturity Including Interest (APMI) & Present Value of Money Market Instrument (PV) and hit the calculate button. Here is how the Add on Rate calculation can be explained with given input values -> 0.388889 = ((7/15)*((210)-35)/(210)).

FAQ

What is Add on Rate?

Add on Rate calculates interest based on the initial principal for the full term of the loan or investment, rather than on the remaining balance as it reduces over time and is represented as AOR = ((YR/d)*((APMI)-PV)/(APMI)) or Add on Rate = ((Year/Days)*((Amount Paid at Maturity Including Interest)-Present Value of Money Market Instrument)/(Amount Paid at Maturity Including Interest)). Year is 12 months used by companies and governments for accounting purposes and preparing financial statements, Days refers to the number of days between settlement and maturity, Amount Paid at Maturity Including Interest refers to the total sum that an investor receives when a financial instrument reaches its maturity date & Present Value of Money Market Instrument refers to the current worth of a financial instrument that will pay a specified amount at maturity, discounted at a given interest rate.

How to calculate Add on Rate?

Add on Rate calculates interest based on the initial principal for the full term of the loan or investment, rather than on the remaining balance as it reduces over time is calculated using Add on Rate = ((Year/Days)*((Amount Paid at Maturity Including Interest)-Present Value of Money Market Instrument)/(Amount Paid at Maturity Including Interest)). To calculate Add on Rate, you need Year (YR), Days (d), Amount Paid at Maturity Including Interest (APMI) & Present Value of Money Market Instrument (PV). With our tool, you need to enter the respective value for Year, Days, Amount Paid at Maturity Including Interest & Present Value of Money Market Instrument and hit the calculate button. You can also select the units (if any) for Input(s) and the Output as well.

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