Mortgages Analyzed
Mortgages Analyzed
Mortgages Analyzed
 
Effective Interest Rate

What is Effective Interest Rate?

Definition
Effective Interest Rate is the nominal interest rate expressed in annual terms.
What It Means
Effective Interest Rate takes into account the differences in various payment streams by taking into account the interest rate and compounding terms.
Acronym
EIR
Category
Finance

Related Terms

  • Compounding: Compounding is the process where the interest is added to the principal amount and the combined amount is used as a base to calculate future interest.... Read More
  • Compounding Frequency: Compounding frequency is the number of times the accrued interest will be added to the principal. A loan compounded monthly has a compounding frequenc... Read More
  • Interest Rate: The rate at which periodic interest will be calculated.... Read More
  • Simple Interest: Simple Interest is a method of interest calculation where the periodic interest is a fixed percentage of the principal amount (original loan amount).... Read More
  • Compound Interest: Compound Interest is a method of interest calculation where the periodic interest is a percentage of the principal amount and accrued interest.... Read More
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