How to Calculate Effective Interest Rate?

Answer When analyzing a loan or an investment, it can be difficult to get a clear picture of the loan's true cost or the investment's true yield. There are several different terms used to describe the int... Read More »

Top Q&A For: How to Calculate Effective Interest Rate

How do I calculate effective interest rate?

Determining Interest AccruedUsing the annual percentage rate calculate interest accrual for one year. This means multiplying the initial value by the annual percentage rate, taking into account com... Read More »

How do i calculate effective annual interest rate on a car loan?

Gather InformationLook up the annual percentage rate, or APR, of your car loan. Convert it to a decimal by removing the percent symbol and moving the decimal point two spots to the left. For exampl... Read More »

What is the effective rate of interest?

An effective rate of interest refers to the actual yield when including the effects of compounding, according to Investopedia. Compounding $1,000 at 10 percent interest once a year, for example, yi... Read More »

What is an effective rate of interest known as?

The effective rate of interest is the annual equivalent rate (AER) of interest paid on a loan or earned on an account. The amount of actual interest depends on the frequency it is compounded and al... Read More »