effective annual rate

The total interest paid or earned in a year expressed as a percentage of the principal amount at the beginning of the year.

Accounting dictionary. 2014.

Look at other dictionaries:

  • effective annual rate — UK US noun [C] (also effective annual interest rate) ► FINANCE the actual rate of interest paid or charged over one year: »The effective annual rate is the amount of interest charged on an overdraft, not including any fees or charges …   Financial and business terms

  • effective annual rate — The total interest paid or earned in a year expressed as a percentage of the principal amount at the beginning of the year …   Big dictionary of business and management

  • Effective interest rate — The effective interest rate, effective annual interest rate, Annual Equivalent Rate (AER) or simply effective rate is the interest rate on a loan or financial product restated from the nominal interest rate as an interest rate with annual… …   Wikipedia

  • effective interest rate — noun 1. the actual annual rate of interest being paid or received after all other charges, costs or other income have been taken into account. 2. the annual rate of interest which is equivalent to a nominal rate over a shorter period. See nominal …   Australian English dictionary

  • effective interest rate — The annual rate at which an investment grows in value when interest is credited more often than once a year. Bloomberg Financial Dictionary …   Financial and business terms

  • Effective Annual Interest Rate — An investment s annual rate of interest when compounding occurs more often than once a year. Calculated as the following: Consider a stated annual rate of 10%. Compounded yearly, this rate will turn $1000 into $1100. However, if compounding… …   Investment dictionary

  • effective annual return — rate of profit yielded by an investment over the course of a year …   English contemporary dictionary

  • Effective annual interest rate — An annual measure of the time value of money that fully reflects the effects of compounding. The New York Times Financial Glossary …   Financial and business terms

  • effective annual interest rate — An annual measure of the time value of money that fully reflects the effects of compounding. Bloomberg Financial Dictionary …   Financial and business terms

  • effective annual interest rate — Fin the average interest rate paid on a deposit for a period of a year. It is the total interest received over 12 months expressed as a percentage of the principal at the beginning of the period …   The ultimate business dictionary

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