The amount of money , expressed as per annum percentage , actually paid on a loan or deposit. The effective interest rate may differ from the nominal interest rate, depending on interest payment schedule .
For instance , when the interest is deducted from a loan when the load is first made , the actual proceeds available to the borrower are less than the nominal loan principal used to calculate the interest payments. The effective interest rate in this case is the interest payments expressed as a percentage of the actual proceeds on a per annum basis.
For instance , when the interest is deducted from a loan when the load is first made , the actual proceeds available to the borrower are less than the nominal loan principal used to calculate the interest payments. The effective interest rate in this case is the interest payments expressed as a percentage of the actual proceeds on a per annum basis.
No comments:
Post a Comment