Finance / July 27, 2018 / Hana Cannon
While cumulative interest is one method of calculating how well a bond investment is performing, the following are more comprehensive yield methods: nominal yield, current yield, effective annual yield, and yield to maturity.
Because every bond and bond fund has a duration, those numbers can be a useful tool that you and your financial professional can use to compare bonds and bond funds as you construct and adjust your investment portfolio.
Daily compounding interest refers to when an account adds the interest accrued at the end of each day to the account balance so that it can earn additional interest the next day and even more the next day, and so on. To calculate daily compounding interest, divide the annual interest rate by 365 to calculate the daily rate. Add 1 and raise the result to the number of days interest accrues. Subtract 1 from the result and multiply by the initial balance to calculate the interest earned.
A common stock is a representation of partial ownership in a company, and is the type of stock most people invest in. Common stock comes with voting rights, as well as the possibility of dividends and capital appreciation. In accounting, you can find information about a company's common stock in its balance sheet.
In Case You Missed It