The Approximate Average Rate of Interest Cognitive Approach

Ferri Briquet

Working Papers from Groupe de recherche en économie financière et en gestion des entreprises, Universite Nancy 2

Abstract: This research work treats formalization of the knowledge of decision makers of SME. It aims at identifying their diagram of reasoning when they make financial decisions. When they prepare the investment plan, these decision makers make an approximation of the distribution of interests and repayments in the annual instalment of loan. These approximations are similar of one decision maker to the other. This work aimes to identify this reasoning, to check their validity and to formalize them.It produces a simplified formula of computation of an average rate of interests in the loans. Formalization used was tested by several decision makers. They there recognized their mode of reasoning. The major interest is the identification of a particular cognitive diagramand the poposal of a analysis chart adapted to its identification.

Keywords: DECISION MAKING; INVESTMENTS; MODELS; FINANCING (search for similar items in EconPapers)
JEL-codes: C93 M10 (search for similar items in EconPapers)
Pages: 19 pages
Date: 2000
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Persistent link: https://EconPapers.repec.org/RePEc:fth:grefge:00-11

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