Categories
Resources for Accountants

Daily Compound Interest (Formula) | Step by Step Calculation with Examples [Video]

Daily Compound Interest (Formula) | Step by Step Calculation with Examples

In this video on Daily Compound Interest, here we discuss how to calculate daily compound interest along with its formula and practical examples.

๐–๐ก๐š๐ญ ๐ข๐ฌ ๐ƒ๐š๐ข๐ฅ๐ฒ ๐‚๐จ๐ฆ๐ฉ๐จ๐ฎ๐ง๐ ๐ˆ๐ง๐ญ๐ž๐ซ๐ž๐ฌ๐ญ?
———————————————————-
Daily compounded interest means interest is accumulated on a daily basis and is calculated by charging interest on the principal plus interest earned on a daily basis and hence is higher than interest compounded on a monthly / quarterly basis due to high compounding frequency.

๐ƒ๐š๐ข๐ฅ๐ฒ ๐‚๐จ๐ฆ๐ฉ๐จ๐ฎ๐ง๐ ๐ˆ๐ง๐ญ๐ž๐ซ๐ž๐ฌ๐ญ ๐…๐จ๐ซ๐ฆ๐ฎ๐ฅ๐š
———————————————————–

A=(P (1+r/n)^(nt)) โ€“ P

๐ƒ๐š๐ข๐ฅ๐ฒ ๐‚๐จ๐ฆ๐ฉ๐จ๐ฎ๐ง๐ ๐ˆ๐ง๐ญ๐ž๐ซ๐ž๐ฌ๐ญ ๐„๐ฑ๐š๐ฆ๐ฉ๐ฅ๐ž
———————————————————–

The bank borrows a total of $5000 where the interest rate is 7% and the balance is borrowed for a term of 3 years. Let’s figure out how much the bank will measure the compounded interest on the loan provided.

From above given data we get,

Principle = $5000, Annual Interest = 7%, N = 365, Time(years) = 3

By using above formula we get,

=($5000*(1+7/365)^(365*3))-$5000
= 1168.27

To know more about the ๐ƒ๐š๐ข๐ฅ๐ฒ ๐‚๐จ๐ฆ๐ฉ๐จ๐ฎ๐ง๐ ๐ˆ๐ง๐ญ๐ž๐ซ๐ž๐ฌ๐ญ, you can go to this ๐ฅ๐ข๐ง๐ค ๐ก๐ž๐ซ๐ž:- https://www.wallstreetmojo.com/daily-compound-interest/

Subscribe to our channel to get new updated videos. Click the button above to subscribe or click on the link below to subscribe – https://www.youtube.com/channel/UChlNXSK2tC9SJ2Fhhb2kOUw?sub_confirmation=1

Watch/Read More
Categories
Resources for Accountants

Overview of ASC 805 [Video]

Accounting for business combinations under ASC 805 can be quite complex! Do you know the difference between a business combination and an asset acquisition under U.S. GAAP? The answer to this question is important because the accounting is totally different! No worries. We have you covered in this CPE-eligible, eLearning course (1.5 CPE)! In this online course we begin with the definition of a business and whether a transaction falls within the scope of ASC 805. We then provide you with an overview of the 4-step acquisition method set out in ASC 805, including whether assets and liabilities acquired should be recognized apart from goodwill and, if so, how they should be measured. If you’re new to the accounting for business combinations under U.S. GAAP, this course is a great place to start! Take the course: https://www.gaapdynamics.com/product/business-combinations-overview-of-asc-805/ Buy all three courses and save! https://www.gaapdynamics.com/product/asc-805-business-combinations/ Learn more about GAAP Dynamics: https://www.gaapdynamics.com/ Check out our other online courses on the GAAP Dynamics Learning Library: https://www.gaapdynamics.com/individual-learning/ Subscribe to GAAP Dynamics to see more videos like these!

Categories
Resources for Accountants

Application of ASC 805 [Video]

This is the introductory video for the third course of the three-part Business Combinations eLearning series. Now that you are familiar with the basic accounting rules and certain ASC 805 advanced issues, this course will apply that knowledge by walking through an example acquisition and requiring you to identify the proper accounting treatment. Take the course: https://www.gaapdynamics.com/product/business-combinations-application-of-asc-805/ Buy all three courses and save! https://www.gaapdynamics.com/product/asc-805-business-combinations/ Learn more about GAAP Dynamics: https://www.gaapdynamics.com/ Check out our other online courses on the GAAP Dynamics Learning Library: https://www.gaapdynamics.com/individual-learning/ Subscribe to GAAP Dynamics to see more videos like these!

Categories
Resources for Accountants

Internal Rate of Return (IRR) | Formula | Calculation with Example [Video]

In this video on internal rate of return (irr), here we learn formula, example of irr along with significance and its drawbacks.๐–๐ก๐š๐ญ ๐ข๐ฌ ๐ˆ๐ง๐ญ๐ž๐ซ๐ง๐š๐ฅ ๐‘๐š๐ญ๐ž ๐จ๐Ÿ ๐‘๐ž๐ญ๐ฎ๐ซ๐ง (๐ˆ๐‘๐‘)?-------------------------------------------------------------------Internal return rate is the rate at which the net present value of the project is zero, the rate at which future cash flows are adjusted to calculate the present value.๐ˆ๐ง๐ญ๐ž๐ซ๐ง๐š๐ฅ ๐‘๐š๐ญ๐ž ๐จ๐Ÿ ๐‘๐ž๐ญ๐ฎ๐ซ๐ง (๐ˆ๐‘๐‘) ๐…๐จ๐ซ๐ฆ๐ฎ๐ฅ๐š-------------------------------------------------------------------NPV= 0= CF0 + CF1/(1+IRR)^1 + CF2/(1+IRR)^2 + ..... CFn/(1+IRR)^n๐’๐ญ๐ž๐ฉ๐ฌ ๐ญ๐จ ๐‚๐š๐ฅ๐œ๐ฎ๐ฅ๐š๐ญ๐ž ๐ˆ๐‘๐‘ ๐ข๐ง ๐„๐ฑ๐œ๐ž๐ฅ------------------------------------------------------#1 - Calculate Cash inflows and outflows in a standard format.#2 - Use the IRR formula in Excel#3 - Compare IRR to Discount Rate๐ˆ๐ง๐ญ๐ž๐ซ๐ง๐š๐ฅ ๐‘๐š๐ญ๐ž ๐จ๐Ÿ ๐‘๐ž๐ญ๐ฎ๐ซ๐ง (๐ˆ๐‘๐‘) ๐’๐ข๐ ๐ง๐ข๐Ÿ๐ข๐œ๐š๐ง๐œ๐ž-------------------------------------------------------------------------The IRR of any project shall be estimated taking into account the following three assumptions:1- The investments made are kept until the maturity dates.2 - The intermediate cash flows will reinvest itself in IRR.3 - By nature all cash flows are periodic, or the time gaps between various cash flows are equal.To know more about ๐ˆ๐ง๐ญ๐ž๐ซ๐ง๐š๐ฅ ๐‘๐š๐ญ๐ž ๐จ๐Ÿ ๐‘๐ž๐ญ๐ฎ๐ซ๐ง (๐ˆ๐‘๐‘), you can go to this ๐ฅ๐ข๐ง๐ค ๐ก๐ž๐ซ๐ž:- https://www.wallstreetmojo.com/internal-rate-of-return-irr/Subscribe to our channel to get new updated videos. Click the button above to subscribe or click on the link below to subscribe - https://www.youtube.com/channel/UChlNXSK2tC9SJ2Fhhb2kOUw?sub_confirmation=1

Categories
Resources for Accountants

Advanced Issues and Disclosures [Video]

This is the introductory video to our self-study eLearning course "Business Combinations: Advanced Issues and Disclosures." Check it out here: https://www.gaapdynamics.com/product/business-combinations-advanced-issues-and-disclosures/ This is the second course of the three-part Business Combinations eLearning series. Now that you are familiar with the basic accounting rules, this course dives deeper into more advanced business combination issues such as exceptions to general guidelines, noncontrolling interests, and measurement period adjustments. Learn more about GAAP Dynamics: https://www.gaapdynamics.com/ Check out our other online courses on the GAAP Dynamics Learning Library: https://www.gaapdynamics.com/individual-learning/ Subscribe to GAAP Dynamics to see more videos like these!