Effective Interest

(noun)

The amount of interest accrued per year after accounting for compounding.

Related Terms

  • effective-interest method
  • Nominal Interest

Examples of Effective Interest in the following topics:

  • Calculating Values for Different Durations of Compounding Periods

    • Finding the Effective Annual Rate (EAR) accounts for compounding during the year, and is easily adjusted to different period durations.
    • But suppose you want to convert the interest rate into an annual rate.
    • The EAR can be found through the formula in where i is the nominal interest rate and n is the number of times the interest compounds per year (for continuous compounding, see ).
    • You can think of it as 2% interest accruing every quarter, but since the interest compounds, the amount of interest that actually accrues is slightly more than 8%.
    • The effective annual rate for interest that compounds more than once per year.
  • Presenting Print Ads Effectively

  • Analyzing Print Ad Effectiveness

  • Presenting Commercial Concepts Effectively

  • Analyzing Commercial Effectiveness

  • Presenting Radio Ads Effectively

  • Analyzing Radio Ad Effectiveness

  • Presenting Outdoor Ads Effectively

  • Analyzing Outdoor Ad Effectiveness

  • Presenting Digital Ad Concepts Effectively

Subjects
  • Accounting
  • Algebra
  • Art History
  • Biology
  • Business
  • Calculus
  • Chemistry
  • Communications
  • Economics
  • Finance
  • Management
  • Marketing
  • Microbiology
  • Physics
  • Physiology
  • Political Science
  • Psychology
  • Sociology
  • Statistics
  • U.S. History
  • World History
  • Writing

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