Accumulated interest rate


At interest rates they are percentages that express a compensation that must be paid to the person who lends or invests a sum of money.

Over time, these rates can vary, either with increases or decreases. Thus, considering the variation in interest rates, we can obtain the so-called accumulated interest rate over a period of time.

The accumulated interest rate can be obtained from a formula, which will be presented below. It is important to emphasize that this formula can also be used to calculate other types of accumulated fees, such as the rate of inflation.

Accumulated interest rate formula

Consider \dpi{120} \mathrm{n} interest rates, \dpi{120} \mathrm{i_1} the first rate, \dpi{120} \mathrm{i_2} the second rate, and so on until \dpi{120} \mathrm{i_n}, the last rate. THE formula for calculating the accumulated interest rate é:

\dpi{120} \mathbf{i_{cumulative} = [(1+ i_1)\times (1+i_2)\times ...\times (i+i_n) - 1]\times 100}

Example 1:Broad Consumer Price Index (IPCA) is an index used to measure inflation in Brazil. Based on the IPCA for the months of a year and the above formula, we can obtain the accumulated IPCA.

Month IPCA (%) IPCA/100
January 0,32 0,0032
February 0,43 0,0043
March 0,75 0,0075
April 0,57 0,0057
May 0,13 0,0013
June 0,01 0,0001
July 0,19 0,0019
August 0,11 0,0011
September -0,04 -0,0004
October 0,1 0,001
November 0,51 0,0051
December 1,15 0,0115
Check out some free courses
  • Free Online Inclusive Education Course
  • Free Online Toy Library and Learning Course
  • Free Online Math Games Course in Early Childhood Education
  • Free Online Pedagogical Cultural Workshops Course

To use the formula, we must divide the rates (%) by 100, getting numbers in decimal form. Therefore, we are going to use the IPCA/100 values ​​presented in the third column of the table above.

\dpi{100} \small \mathbf{i_{a} = [(1.0032)\times (1.0043)\times (1.0075) \times... \times (1.0011) \times (0.9996) \times (1.001) \times (1.0051) \times (1.0115) - 1]\times 100}
\dpi{100} \small \mathbf{i_{a} = [1.04306 - 1]\times 100}
\dpi{100} \small \mathbf{i_{a} = [0.04306]\times 100}
\dpi{100} \small \mathbf{i_{a} = 4.306}

Therefore, the IPCA accumulated in 2019 was approximately 4.31%.

You may also be interested:

  • simple interest
  • Compound interest
  • Financial math

The password has been sent to your email.

Plasma membrane or plasmalemma

Plasma membrane or plasmalemma

THE plasma membrane or plasmalemma it is a cellular envelope present in all living cells, whether...

read more
Nordic Mythology – What is it, gods, worlds, myths, Ragnarok, movies

Nordic Mythology – What is it, gods, worlds, myths, Ragnarok, movies

THE Norse mythology or Germanic designates the couple of mythical and religious narratives of tho...

read more
Thor, the god of thunder

Thor, the god of thunder

Thor, O God of thunder, is one of the best known gods of Norse mythology. His popularity was than...

read more