Interest rates and self-sufficiency

This study guide was first published as a GEMINI technical note by ACCION International. It was written by Katherine Stearns. It is a straightforward and easy to follow exposition of the role of interest rates from a borrower’s and a lender’s perspective. It explains the differences between nominal, effective and real interest rates and shows how each of these can be calculated. The guide also examines how lenders can establish interest rates and fees structures to ensure self-sufficiency of the institution. The study guide ends with a set of questions and problems which can be worked through to reinforce the points covered in the lessons.

Resources

resource title type year resource
Interest Rate Problems Document 1991
This resource appears in: Interest rates and self-sufficiency

A selection of questions and calculation exercises to reinforce your learning on interest rates and self-sufficiency. These have been edited and updated since the original publication. The attached spreadsheet facilitates the calculations.

Author Stearns, K.
Publisher ACCION
Region / Country Global
Interest Rate Problems Document 1991
This resource appears in: Interest rates and self-sufficiency

A selection of questions and calculation exercises to reinforce your learning on interest rates and self-sufficiency. These have been edited and updated since the original publication. The attached spreadsheet facilitates the calculations.

Author Stearns, K.
Publisher ACCION
Region / Country Global
Keywords Interest Rate
Lesson 1: The Role of Interest Rates Lesson 1991
This resource appears in: Interest rates and self-sufficiency

A look at the role of interest from the borrower's and lender's perspective.

Author Stearns, K.
Region / Country Global
Lesson 2: Nominal, Effective and Real Interest Rates Lesson 1991
This resource appears in: Interest rates and self-sufficiency

An explanation of different types of interest rates and their method of calculation.

Author Stearns, K.
Region / Country Global
Lesson 3: Establishing Interest Rates for Self-Sufficiency Lesson 1991
This resource appears in: Interest rates and self-sufficiency

Self sufficient financial institutions need to design an interest rate and fee structure that generates enough income to cover their costs. This lesson explores that process by examining both the cost and income side of the equation. It includes a look at the impact of late payments, loan terms and idle funds on the calculation.

Author Stearns, K.
Region / Country Global
Lesson 4: Making the Calculations Lesson 1991
This resource appears in: Interest rates and self-sufficiency

A review of the calculations involved in setting up an amortization schedule and calculating effective interest rates. The examples can be checked in the spreadsheet provided.

Author Stearns, K.
Region / Country Global
Solutions to Interest Rate Problems Document 1991
This resource appears in: Interest rates and self-sufficiency

Explanations and answers for interest rate problems. Edited and updated from original publication.

Author Stearns, K.
Publisher ACCION
Region / Country Global

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