Distinguish between the nominal rate of interest and effective rate of interest
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Distinguish between the nominal rate of interest and effective rate of interest ...??
Effective interest rate is the one which caters the compounding periods during a payment plan. ... The nominal interest rate is the periodic interest rate times the number of periods per year. For example, a nominal annual interest rate of 12% based on monthly compounding means a 1% interest rate per month (compounded).
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