Effective Rate financial definition of Effective Rate. Effective Rate finance term by the Free Online Dictionary.

Effective rate

A measure of the time value of money that fully reflects the effects of compounding.

Effective Interest Rate

The interest rate on a debt or debt security that takes into account the effects of compounding. For example, if one has a fixed-income investment such as certificate of deposit that pays 3% in interest each month, the effective interest rate is more than 3% because compounding the interest results in a (slightly) greater principal each month on which the interest rate is calculated. In this example, the effective interest rate rate is calculated thus:

Effective interest rate = (1 + .03/12)^12 - 1 = .0304 = 3.04%, where .03 is the simple interest rate and 12 is the number of times in a year interest is compounded. It is also known as the annual effective rate or the annual equivalent rate. See also: Stated annual interest rate, annual percentage yield.

Effective Rate

The interest rate adjusted for intra-year compounding.

Because interest on a mortgage is calculated monthly, a 6% mortgage actually has a rate of .5% per month. If there were no principal repayments the first year, $100 invested in a 6% mortgage would actually earn $6.17 of interest during the year because of reinvestment of monthly interest. The “effective rate” is thus 6.17%, while 6% is termed the “nominal” rate. Similarly, a 6% bond on which interest is paid quarterly has an effective rate of 6.14%.

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Bank-Discount Basis Cost of Debt discount points Effective Annual Interest Rate effective interest rate Effective Rate of Interest Effective Tax Rate face interest rate Interest Accrual Period Nominal Nominal Annual Rate nominal interest rate yield	TAX, CUSTOM AND OTHER INCENTIVES * 10 YEAR TAX HOLIDAY--Investors in TIDZs are entitled to 10-year profit tax exemption and to 50% reduction of personal income tax for a period of 5 years, so that the effective rate of personal income tax will amount to 5%. Haier and Triview begin building new factory in Macedonia: computers ... by Macedonian Business Monthly For non combat (sustained): 50 rounds per minute effective rate of fire, which means any combination of bursts not to exceed 50 rounds within a one minute period. Continuous firing of gun by PS, the Preventive Maintenance Monthly 5) Average effective rate for year; rate in effect at end of month or week. Interest rates and bond yields by Economic Indicators	Education Savings Account Educazione continua Edward George EE EEC EEK Efecto de desplazamiento Efecto riqueza Efectos comerciales en eurodivisas Efeito de expulsao Efeito riqueza Effectifs personnel effective age Effective Annual Interest Rate Effective Annual Yield Effective call price Effective convexity effective date Effective Debt Effective duration effective gross income effective interest rate Effective Margin Effective Net Worth effective procuring cause Effective Rate Effective Rate of Interest effective rental rate Effective Sale effective spread Effective Tax Rate effective yield Effet d'eviction Effet de commerce en eurodevises Effet de patrimoine Effeto di comodo Effets publics Effetto Effetto alone Efficiency efficiency apartment efficiency ratio Efficient Capital Market Efficient diversification Efficient Frontier Efficient Market Efficient Market Hypothesis Efficient Market Theory Efficient Markets Theory Efficient Portfolio Efficient Set	Effective procedure effective procuring cause Effective Professional Learning Community Effective Program Projection Effective Project Approval Effective Project Approval Document Effective Project Management Group Effective Projected Area Effective Propagation Loss Effective Provision for Special Educational Needs Effective Provision of Pre-School Education Effective Public Health Practice Project Effective R-Matrix Model Effective radiated power Effective radiated power Effective Radiated Power (ERP) Effective Radiated Power Watts Effective Radiated Voltage effective radiating area effective radiation Effective radius effective radius of the earth effective rainfall effective rake effective range Effective Rate Effective Rate Change effective rate of interest Effective rate of protection Effective rates Effective rates Effective rates Effective rates Effective Rates of Interest Effective Rates of Protection Effective Reference Time Effective Refractory Period Effective Refractory Period Effective Refractory Period Effective Refractory Period Effective Refractory Period Effective Refractory Period of the Accessory Pathway Effective Refractory Period of the Atrioventricular Node Effective Refractory Period of the Right Ventricle Effective Regurgitant Orifice Area effective reinforcement effective rejoinder effective renal blood flow effective renal blood flow effective renal blood flow effective renal blood flow effective renal blood flow effective renal plasma flow effective renal plasma flow effective renal plasma flow effective renal plasma flow

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Bank-Discount Basis
Cost of Debt
discount points
Effective Annual Interest Rate
effective interest rate
Effective Rate of Interest
Effective Tax Rate
face interest rate
Interest Accrual Period
Nominal
Nominal Annual Rate
nominal interest rate
yield

TAX, CUSTOM AND OTHER INCENTIVES * 10 YEAR TAX HOLIDAY--Investors in TIDZs are entitled to 10-year profit tax exemption and to 50% reduction of personal income tax for a period of 5 years, so that the effective rate of personal income tax will amount to 5%.

Haier and Triview begin building new factory in Macedonia: computers ... by Macedonian Business Monthly

For non combat (sustained): 50 rounds per minute effective rate of fire, which means any combination of bursts not to exceed 50 rounds within a one minute period.

Continuous firing of gun by PS, the Preventive Maintenance Monthly

5) Average effective rate for year; rate in effect at end of month or week.

Interest rates and bond yields by Economic Indicators

Education Savings Account

Efecto de desplazamiento

Efecto riqueza

Efectos comerciales en eurodivisas

Efeito de expulsao