Effective rate formula
The effective annual rate is also known as an effective rate or annual equivalent rate is the rate of interest that is actually earned or pay after compounding and it To calculate the effective annual interest rate, when the nominal rate and compounding periods are given, you can use the EFFECT function. In the example Effective Interest Rate on a Discounted Loan. Some banks offer discounted loans . Discounted loans are loans that have the interest payment subtracted from the