Effective Interest Rate
Interest rate, Nominal interest rate, Compound interest, Annual percentage rate, Annual percentage rate
978-613-6-68365-2
6136683652
56
2011-06-16
29.00 €
eng
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Please note that the content of this book primarily consists of articles available from Wikipedia or other free sources online. The effective interest rate, effective annual interest rate, annual equivalent rate (AER) or simply effective rate is the interest rate on a loan or financial product restated from the nominal interest rate as an interest rate with annual compound interest payable in arrears. It is used to compare the annual interest between loans with different compounding terms (daily, monthly, annually, or other). The effective interest rate differs in two important respects from the annual percentage rate (APR): 1 the effective interest rate generally does not incorporate one-time charges such as front-end fees; 2 the effective interest rate is (generally) not defined by legal or regulatory authorities (as APR is in many jurisdictions).
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