effective annual rate
21Annual percentage yield (APY) — The effective, or true, annual rate of return. The APY is the rate actually earned or paid in one year, taking into account the affect of compounding. The APY is calculated by taking one plus the periodic rate and raising it to the number of… …
22Nominal interest rate — In finance and economics nominal interest rate or nominal rate of interest refers to the rate of interest before adjustment for inflation (in contrast with the real interest rate); or, for interest rates as stated without adjustment for the full… …
23Interest rate — Finance Financial markets Bond market …
24effective rate — Another name for annual percentage rate that refers to the amount of yearly interest to be charged by a lender on the money borrowed by a debtor. In federal income tax law, the actual tax rate that an individual taxpayer pays based upon his or… …
25effective yield — A measure of the annual return from an investment. The Effective yield is calculated by dividing the coupon interest rate by the amount invested expressed as a percentage of the par value. American Banker Glossary yield or return on a short term… …
26Discount rate — For the interest rate charged to banks for borrowing short term funds directly from the Federal Reserve, see discount window. For the fees charged to merchants for accepting credit cards, see Discount Rate under Merchant Account. For discount… …
27Stated Annual Interest Rate — The return on an investment that is expressed as a per year percentage, and that does not account for compounding that occurs throughout the year. The effective annual interest rate, on the other hand, does account for intra year compounding that …
28Adjustable-rate mortgage — A variable rate mortgage, adjustable rate mortgage (ARM), or tracker mortgage is a mortgage loan with the interest rate on the note periodically adjusted based on an index which reflects the cost to the lender of borrowing on the credit… …
29Internal rate of return — The internal rate of return (IRR) is a capital budgeting metric used by firms to decide whether they should make investments. It is an indicator of the efficiency or quality of an investment, as opposed to net present value (NPV), which indicates …
30base rate — Also known as the repo rate. The rate set by the Bank of England which determines how much other banks and building societies pay for loans they take out from the Bank of England. The base rate in turn affects the minimum rate at which banks are… …
