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

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 of interest

The rate of interest that incorporates compounding in the calculation used to determine the amount of interest to be credited to an account. For amounts invested during an entire year, the annual effective rate of interest multiplied by the principal will equal the amount of earned interest.

Mentioned in	?		References in periodicals archive	?		Financial browser	?		Full browser	?
Nominal nominal interest rate	The effective rate of interest you pay over the course of this loan may be higher or lower if you had obtained a fixed rate second mortgage. Refinancing Home and Mortgages Consultants by webmaster homeloans / Banking, finance and accounting community With a lower effective rate of interest and a longer payment period for the consolidation, the borrower has an advantage of carrying lesser financial obligation at a regular interval. Student Loans Consolidation Rate; Points to Consider by Jim Kesel / Finance and Investment community Under the constant-yield method, interest is accrued by applying an effective rate of interest to the unpaid balance of a loan for a given period. Rule of 78's no longer acceptable by LaBelle, Brett E. / The Tax Adviser	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 Efficient surface	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 Effective rate 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 effective renal plasma flow Effective Renal Plasma Flow or Renal Blood Flow

Mentioned in

References in periodicals archive

Financial browser

Full browser

Nominal
nominal interest rate

The effective rate of interest you pay over the course of this loan may be higher or lower if you had obtained a fixed rate second mortgage.

Refinancing Home and Mortgages Consultants by webmaster homeloans / Banking, finance and accounting community

With a lower effective rate of interest and a longer payment period for the consolidation, the borrower has an advantage of carrying lesser financial obligation at a regular interval.

Student Loans Consolidation Rate; Points to Consider by Jim Kesel / Finance and Investment community

Under the constant-yield method, interest is accrued by applying an effective rate of interest to the unpaid balance of a loan for a given period.

Rule of 78's no longer acceptable by LaBelle, Brett E. / The Tax Adviser

Efecto de desplazamiento

Efecto riqueza

Efectos comerciales en eurodivisas

Efeito de expulsao

Efeito riqueza