3.11 Nominal Interest Rate (I/Y): Formula Approach

Calculating the periodic interest rate (i) algebraically using formulas is challenging because it is difficult to isolate the interest rate variable in either the Present Value (PV) or Future Value (FV) formulas. As a result, we focus on using a financial calculator to determine the nominal interest rate (I/Y). This rate can then be applied to calculate the periodic payment. For instructions on the calculator approach, please refer to Section 3.6.