 # effective interest rate

Your Search returned 5 results for effective interest rate

effective interest rate - the return on an investment or the rate owed in interest on a loan when compounding is taken into account.

A credit plan charges interest rate of 36% compounded monthly. Find the effective rate.
A credit plan charges interest rate of 36% compounded monthly. Find the effective rate. [U]Calculate Monthly Nominal Rate:[/U] Monthly Nominal Rate = Annual Rate / 12 months per year Monthly Nominal Rate = 36%/12 Monthly Nominal Rate = 3% [U]Since there are 12 months in a year, we compound 12 times to get the effective rate below:[/U] Effective Rate = (1 + Monthly Nominal Rate as a Decimal)^12 - 1 Since 3% = 0.03, we have: Effective Rate = 100% * ((1 + 0.03)^12 - 1) Effective Rate = 100% * ((1.03)^12 - 1) Effective Rate = 100% * (1.42576088685 - 1) Effective Rate = 100% * (0.42576088685) Effective Rate = [B]42.58%[/B]

Capitalized Cost and Periodic Charge
Given an Asset Value (A), a Salvage Value (S) at time (N), a sinking fund rate of (j), an effective rate of interest (i), and maintenance expense (M), this calculator solves for periodic charge (H) and capitalized cost (K)

Effective Annual Yield Rate
Figures out the effective annual yield rate of interest entered by compounding daily, weekly, semi-monthly, monthly, quarterly, semi-annually, and continuously.

Nominal Yield
Given an effective annual rate of interest based on a compounding period, this determines the nominal yield.

Vendor Discount Effective Rate of Interest
Calculates the effective rate of interest earned from a vendor discount for a prepayment of a balance within a certain amount of days for a percentage discount