91视频 Dictionary: Effective rate

By: 91视频 Staff//May 5, 2010//

91视频 Dictionary: Effective rate

91视频 Staff//May 5, 2010//

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effective rate: the real measurement of earnings or savings associated with the theory that money today is more valuable than money tomorrow because it can accumulate interest through compounding. For example, a three-percent fixed interest rate investment is actually higher than three percent because the principal gets bigger each cycle, making the each return on the investment higher.