Annual equivalent rate

The effective interest rate, effective annual interest rate, or simply effective rate is the interest rate on a loan or financial product restated from the nominal interest rate as an interest rate with annual compound interest.Since an interest rate may be defined using different compounding terms (daily, monthly, annually, or other), the annual "cost" of interest between two different loans may not be comparable. The effective interest rate is used to make such loans more comparable by converting any loan into the equivalent annual rate.
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Le taux effectif représente le taux annuel capitalisé annuellement équivalent au taux nominal d'un emprunt ou d'un produit financier.
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