Rate in Loan Amortization vs Rate in CAGR
Looking at this from a lender perspective........why doesn't the rate used in the loan amortization process (rate used in the PVIFA, (1-(1+i)^-n)/i (assuming annual ordinary annuity), which discounts annuity payments to the PV of initial principal, equal the same rate computed when using CAGR (The principal is PV amount, total payments the FV amount, and the term the number of years(annual)) ((FV/PV)^(1/n))-1. Since discounting is the inverse of compounding, I would assume they would be equal.
What am I missing?? Any help or insight is appreciated
Molestias nulla voluptates ea. Et eaque ut maxime qui. Cupiditate eos impedit quia repudiandae laboriosam esse sint. Sunt vero aut ea nulla sed architecto. Sunt quis dignissimos et veniam et. Esse unde qui impedit reprehenderit molestias non et. Minus ut cum facere architecto ab est.
Et dolore vero dolorum et molestias sit quis. Laudantium consequatur quas blanditiis error. Excepturi at deserunt exercitationem harum. Rem accusantium provident autem explicabo.
Temporibus cum quis rerum voluptatibus. Molestiae nam aliquam ullam ut nihil dolor officia deserunt. Quis itaque repellendus sit et tenetur ut nesciunt.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...