In this article, you will discover the implications that exist within the calculation of the interest rate of a fixed term.
There are different methodologies to approach the calculation and different interest rates and fixed terms that are observed today within the Argentine financial system.
In the case of a fixed term, the interest rate appears as the percentage of profit that every person who has assigned a certain amount of money to the bank expects to obtain, which has agreed to keep it in their custody within a certain time that, upon completion, has the duty to return said amount plus a sum of money in the form of agreed interest.
This sum of interests is those that represent the final performance of a fixed term.
How is the interest of a fixed term in pesos calculated?
It is necessary to understand that calculating your return is calculating the total interest that you generated towards the end of the period that the fixed term covered. To make this concept better clear, let’s look at an example:
A person owns $ 2,000 pesos and decides to deposit (lend) that money to the bank for a period of 30 days. Assuming that the bank offers you a TNA (nominal annual rate) of 30%, we have:
- Capital ($) to invest: $ 2,000
- Duration of the fixed term (t): 30 days
- The interest rate is given by the bank (TNA): 0.30 (30%), in order to make calculations, the rate must be expressed numerically and not in percentage terms.
To know how to calculate the interest for a fixed term, taking into account the data provided above, simply apply a simple formula :
- Principal x (interest rate x term / 365) = interest earned
That is: 2,000 x (0.3 x 30/365) = $ 49.31 interest earned by depositing $ 2,000 at 30 days in a fixed term that promised an interest rate of 30% per annum nominal.
Finally, to calculate the amount of a fixed term in pesos at the end of the period considered, it is nothing other than adding the interest generated to the initial capital :
- $ 2,000 + $ 49.31 = $ 2,049.31 is the final amount of this fixed term.
What interest does a bank give you for a fixed term in pesos?
In general, the main banks in Argentina work with a nominal annual rate (TNA).
The 10 banks with the highest volume of deposits are:
- National Bank
- Santander river
- Bank of the Province of Buenos Aires
- BBVA Argentina
- Macro Bank
- HSBC Bank
- Cooperative credit
- Bank of the City of Buenos Aires
All those mentioned offers a Fixed Term TNA $ 100,000 non-transferable to 30 days of 37%, although this percentage is not static but can vary.
What is the TNA in a fixed term?
This rate is what the bank pays for having made a loan by the client and is not added to the capital.
In other words, once the duration of the fixed term is over, the interest generated is withdrawn and is not reinvested or integrated into the capital again.
Now, what would happen if the money saver or depositor decided not to withdraw the interest earned? In this situation, the concept of compound interest arises and the annual effective rate (TEA) appears with which banks also work and usually turns out to be a slightly higher rate than the TNA.
What is the TEA in a fixed term?
It is that rate that accumulates interest on the initial capital, that is, the interests earned are reinvested again to generate more interest on a new capital to be invested.
So: what is the difference between TEA and TNA?
If not clear, the difference between the TEA and TNA is whether the depositor decides whether or not to withdraw the interest at the end of the duration of the fixed term.
How is a fixed term calculated at TNA?
If the depositor decides to withdraw the interest, the annual nominal rate is used and the capital to be invested is always the same.
In our example, the starting capital was $ 2,000 and the interest earned was $ 49.31. If at the end of the 30 days of the fixed term, the client withdraws the interest and decides to renew the fixed term for another 30 days, the capital to be invested will continue to be $ 2,000 pesos with a TNA of 30% and the interests obtained will also return to be $ 49.31.
How to calculate TEA compound interest on a fixed term?
But if the bank’s client decides not to withdraw the interest and reinvest it in a new fixed-term, in the case of our example the capital to be invested is modified and now it is equal to the sum of the initial capital contributed ($ 2,000) plus the interest earned ($ 49, 31).
The compound interest that arises now is calculated on the basis of this new capital to be invested equal to $ 2,049.31.
It is to be expected that in this new situation the new interests earned will be higher since the base of the invested capital is higher as well.
How to calculate TNA?
So far we can say in conclusion that the TNA is a reference interest rate, which is used as a basis for estimating effective rates, and therefore this rate does not allow us to see the true financial cost/benefit of the interest generated by a certain operation.
The calculation of this base interest rate is not a critical point to know, since it is usually a rate imposed by the banks.
In Argentina there is not much game or variety with this rate, most of the major financial institutions establish the same TNA for fixed deposits, which ends up undermining this investment alternative and ultimately making it look unattractive.
How to calculate TEA?
Calculating the TEA does require a bit more attention and complexity.
As previously mentioned, the TNA serves as the basis for calculating the effective rates, that is, the TNA appears as a key element to arrive at the value of the TEA.
So how to calculate TEA from TNA?
To answer this, let’s look at an example :
Suppose that a bank offers a fixed term at a 13% TNA with monthly capitalization. As we mentioned before, when calculating the TEA, it is expected that it will be a little higher than the TNA, since it represents the true value of the cost/benefit that the interests obtained finally generate.
Applying the formula we have:
- N / months of TNA
- TEA (n) = (1+ (Nominal / m)) – 1
- TEA (12) = (1+ (0.13 / 12)) – 1 = 0.1380. That is, an TEA of 13.80%
In this formula “n” = 12 (months) because we are looking for the annual effective rate; “m” is also equal to 12 because interest is capitalized or calculated in each month of the year, that is, 12 times interest is calculated.
The “months of the TNA” are equal to 1 because its capitalization is monthly; if it had been bimonthly the denominator would be 2, quarterly 3 and so on.
This may seem like “a lot of calculation” to you. But do not despair, you should know that these simulations can be done when hiring your fixed term, you just have to understand that the TEA works with compound interest and is a rate that will take into account the monthly capitalizations, while the nominal is a simple rate.
How is the monthly and annual rate calculated for a fixed term?
This is very simple. To calculate the monthly rate, you will only have to divide the annual rate by 12 months, in this way you will get your monthly nominal rate, which will be equal to the interest that your fixed term will generate for the period of 1 month.
In this way, you will be able to obtain the result of the profitability of your investment. The annual rate in general is not necessary to calculate since it is offered by the banks where you will make the fixed-term investment.
Other alternatives: how to calculate a fixed term in Excel?
Despite the calculations and formulas that we have been addressing so far, there are other simpler or more technological ways to calculate a fixed term.
For example, there are the calculators that each bank offers through its web pages, where it is requested that the amount be deposited and the term thereof be entered. This is very common in the case of traditional fixed deposits.
But currently, there are the new fixed terms UVAs, which, unlike the traditional ones, take into account the incidence of inflation.
Another alternative, less important, but to take into account is the difference in relation to interest between fixed terms and savings banks.
As we all know, inflation is a variable that carries a lot of uncertainty, which means that the calculation or estimation of a fixed-term UVA is not so exact or simple.
That is why the option of working with Excel spreadsheets appears to determine the possible interests and amounts that a fixed term may generate. These worksheets allow simulations under different inflation scenarios, calculating for each scenario the yield, total interest and final capital.
Fixed-term prime rate: where to find the best rate?
What is the best bank to invest in? or which bank pays more fixed-term interest?
These are questions that are frequently asked by people interested in opting for this investment alternative. Actually, as we said, it will depend a lot on the type of fixed-term in question.
Today, in addition to the traditional fixed terms and the UVAs that we already mentioned, there are others, which also pay a preferential rate.
The offer of an exclusive rate is nothing more than a strategy of some banks to attract new clients and stay competitive in the financial market that is currently very even since almost all offer the same amount of interest.
Should you buy dollars or invest in a fixed term?
According to monthly estimates referring to the evolution of consumer prices, interest rates and the wholesale exchange rate, three assumptions were made about the way in which the gap between the blue and the official dollar will move.
In this sense, in the quarter from July to September, the best investment would be the dollar, in case the gap between official and blue climbs from 82% today to 90% at the end of the quarter.
On the other hand, if the current level were maintained, there would be a virtual tie between the fixed-term adjustable by UVA and the traditional one, since both would have profitability of 8.7%. Thus, they would beat the blue, which would offer 6 per cent.
With respect to the fourth quarter, which runs from October to December, according to the REM (Market Expectations Survey), the best option would be the dollar if the gap between the parallel and the official rises to 90% or even up to 100%. hundred.
In these two scenarios, the profitability would be 11.6% and 14.3%, respectively, compared to a gain of 8.7% and 8.8% that the traditional fixed term and the one adjustable by UVA would obtain.
How to avoid closing a business?
How to avoid closing a business?
The Covid-19 pandemic has wreaked havoc on everyone’s pockets, but especially on entrepreneurs who have even had to face the closure of a business due to low sales.
According to the National Institute of Statistics and Geography (Inegi), more than 1 million micro, small and medium-sized enterprises (MSMEs) in which almost 3 million people worked closed permanently due to the crisis.
The data is worrying because of the 4.9 million establishments registered before the pandemic; only 3.9 million survived. The damage of the pandemic is apparent because in this Inegi study, carried out from September to October, almost eight out of 10 companies reported the decrease in income (due to the pandemic) as the primary type of impact.
“According to the size of the company, it is observed that, in general terms, all companies have had decreases in their effects,” Inegi said in a statement.
At-risk 46% of SMEs if sales continue to be low
According to the Institute, the highest number of closures was registered in non-financial private service establishments (24.92%), shops (18.98%), and manufacturing (15 percent).
Experts consider that if they continue to operate with the same income level as before, only 46% of micro-businesses and 47% of small and medium-sized companies will survive from three to 12 months.
How to avoid the closure of a company?
Undoubtedly the current market circumstances can push a company to the brink of closure. In this case, the first logical reaction of those who direct it is to try to prevent its disappearance by all possible means.
If you are at a critical point in your business, the first thing we recommend is not to lose your cool. You are not alone; you must focus on finding the best solutions without losing sight of the goal: to survive.
Carry out an analysis of your business
If your company is in a difficult situation in a market that is not excessively saturated or in decline, it is less productive than its competitors.
At this point, it is essential that you carry out an analysis, process by process, to find those aspects in which it is necessary to improve to gain competitiveness.
Reduce or reform the structure of the company
Having to do without employees is something nobody wants, but it is necessary to analyze positions and tasks at a critical point.
Something toxic for any company is when the departments are unclear about their functions; tasks are intermingled, specific sectors require more personnel while others have plenty. You must analyze all of this and make the decisions that best suit the common good: the company.
listen to others
You may be the business owner, but that is not why you are alone in everything. Opening the expression of ideas and opinions to all members of your business is the way to maximize knowledge and contribute ideas to avoid dismissals or closure.
Remember that each person from their work area can promote improvements that bring greater competitiveness.
Make the most of social media.
According to every pocket, social networks have become a super important communication channel for any business and according to every pocket. You don’t have to invest a single peso, and it will help you increase the company’s exposure.
Remember that in a context where many companies offer very similar products and services, the emotional aspect can be decisive in the choice of consumption.
Even if you think that borrowing at a critical moment is the least recommended, you have to ponder something: are you willing to let your project die?
The proper use of business financing is a crucial point for any business, so SME credit should be seen not as a debt but as a business tool.
Be very careful: the most minor recommended thing is that you choose to finance your business with your credit cards or personal loans. These financings are designed for personal use, so their interest rates are usually very variable, something that, instead of helping you, will only affect you.
The most advisable thing is to opt for a specialized financial product: a business loan. You have many options, such as traditional banks, the government or fintech.
Remember that you are not alone; look for the best business ally and keep the dream of your business firm. 2022 will come with better opportunities, and we want to see you grow with them.
How to Generate Name Ideas for a Computer or Technology Company
Technology has been one of the greatest inventions created by the human being, so much so that until today it has become an instrument of vital importance for our daily life, it is used to quickly and effectively solve problems that day by day they appear in a person’s life, it is also used for the creation of instruments, artifacts, utensils and for obtaining certain knowledge that allows women and men to be able to modify their environment and adapt to it.
As time passes, technology advances and progress in an incredible way, influencing various existing areas such as daily life or the business area, thus opening the way to a large number of technological products that are available to people in the market.
This, together with the necessary knowledge, gives the possibility of a good business opportunity, you could be able to create a formidable project, which would also imply a series of challenges that you must overcome, among them is creating a suitable name for your company, or business.
How to create a good name for a company?
The question of how to create an attractive name for your company has always generated a moment of stress, worry, and despair, when wanting to develop a company, but do not worry anymore, it is a matter of implementing the necessary guidelines and organizing your ideas, to make up a good name.
Think of one that stands out
There are many cases where the company does not rely on the product it offers to create a name, they simply create a curious and unusual name, capable of attracting the customer’s attention, take into account that said name cannot resemble any existing word or name, as it could cause some confusion
A short and simple name
Sometimes doing less does more, a short and simple name can seem more attractive than a long and confusing one, and it also has the advantage of being easier for people to remember.
Create word games
Here your creativity comes into play, making a short and simple name will not be enough for people to become familiar with your company, a play on words with the theme of your business and having to do with the product you offer can facilitate to people the fact of being able to remember the name of your company, and get a clearer idea of the product it handles.
A name that is easy to pronounce
We know that there are a large number of companies whose name is not pronounced properly to this day because it was created in a language other than the native language, or simply because they wanted to create it that way, but a name whose pronunciation be simple, it could cause more interest in the client, likewise, it could avoid creating some confusion in the same.
A name without double meaning
Here we touch on a delicate issue, and it is the fact of trying not to create a name that has ambiguous or unpleasant words since this could cause a very uncomfortable situation, take into account that since there is a great diversity of languages a word could mean something else in other countries.
How to generate name ideas for a computer or technology company?
Take into account the recommendations given above to create a name, in case it is very difficult for you to create a name, you can generate it with the help of free web pages such as the Logaster page, or you can choose to search the best brand name generators, here I will give you a list of examples of names created for a technology company
Names for a technology company
- Inter Think
- Info Solutions
- Nova IT
Names for computer sales companies
- Super Hardware
- Advanced PC
- Compu Net
- High Gamma Computers
- Expert PC
Names for computer systems companies
- Micro Corp System
- True data
- Procomputer Systems
- Alpha Soft
- Supra Systems
- OffiLink Systems
What are the best marketing ideas to attract clients to a fine jewelry store?
The fine jewelry trade is a very particular market. In fact, it is not intended to provide a need or comfort. Well, its sales are based on promoting feelings or emotions full of symbolism from ancient traditions. If you are the owner of a fine jewelry business and you are looking for good ideas to attract customers, in this article we will show you what are the best marketing ideas to attract customers?
The best marketing ideas to attract customers to fine jewelry
A survey reveals that two-thirds of fine jewelry buyers start their search online before buying. Others use social media for information and help. For this reason, digital media are an excellent marketing strategy to create communities around your company or brand. These are the best marketing ideas to attract customers:
Search Engine Paid Advertising (SEM)
This is one of the best ideas to attract customers, invest so that your ads appear as high as possible in search engines. Make the most of your investment by optimizing what you cancel for each click dividing it towards your buyer persona. Another thing you can do is create display remarketing campaigns to attract interested users.
Organic search engine optimization (SEO)
Ranking high in organic search results is a good marketing idea. Doing this is very profitable and will allow you to increase sales, without the need to resort to large advertising investments. However, it takes time to see your results. Hence, the importance of optimizing SEO to improve web positioning. Keep these concepts in mind:
- Audit your web page, look for bugs in meta descriptions, usability, URL.
- Design content of interest to attract more web traffic.
- Link your website to social networks.
- Optimize your keywords.
Create marketing strategies for jewelry in your emails
Having a good database will allow you to create personalized newsletters with offers and promotions. Email marketing is very effective for remarketing, you can divide and personalize emails to users who have visited your website or social networks.
Write in a blog about jewelry
Creating a blog is a very profitable marketing idea. Writing on a blog is cheap and only takes time, although not much, the results can be very effective if you talk about the right topic. Search for ideas for articles that may interest your audience, remember to use keywords, and be patient.
Use social media
Social media is a very effective marketing tool for attracting potential customers. Through social networks, you can promote your products and manage your brand. For example, you can create an Instagram profile for business and a Facebook page for your business.
Google My Business
You can register your jewelry in Google My Business so that it appears in local search engines. This facilitates interaction with potential customers through the Google Maps search engine and as a result, you will attract more customers to your store.
Use Google Shopping or Marketplace
Using Google Shopping or Marketplace is a very good marketing idea to attract customers, as they are huge digital markets in which you can promote your fine jewelry, and in this way reach more public.
Although these portals ask for a percentage for each sale, it is always good to have an item available in a Marketplace. You may not get many sales, but they will help you reinforce your brand.
We hope this article has been very useful for you, write to us your respectful comments, your opinion is important to us and remember to share this information with your family and friends.
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