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A measure for the extra-costs to evaluate the global cost of credit

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26/5/2020 View Submission

www.cmstatistics.org/RegistrationsV2/MAF2020/viewSubmission.php?in=297&token=97s68ns91no6pr11pr6sno25958so6o4 1/1

A0297

Title: A measure for the extra-costs to evaluate the global cost of credit Authors: Luisa Tibiletti - University of Torino, Italy (Italy) [presenting]

Mariacristina Uberti - University of Torino (Italy)

Abstract: The aim is to measure the impact of the extra-costs payment on the Effective

Annual interest Rate (EAR) of a consumer instalment credit. We show that EAR can be approximated by augmenting the credit rate with an extra-costs rate addendum. This latter addendum is a function of the Macaulay duration of the extra-costs payments.

View Submission - MAF2020

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