WHAT IS A NOMINAL AND EFFECTIVE INTEREST RATE? | Financially Fabulous

Here I explain both nominal interest rate and effective interest rate. The interest rates that we see advertised are the nominal interest rates and they assume that interest only compounds once a year. In reality many credit products actually compound far more frequently. The video provides a challenge with a FREE downloadable worksheet to help you determine how often the interest on each one of your credit account compounds.

http://limor.money/2016/04/nominal-in...

Here is a recap of the video: https://goo.gl/LxDodJ

00:30 Introduce nominal interest rate and effective interest rates

00:40 What is interest

01:00 Comparing interest across different products

01:30 Annualized percentage rate (APR) is nominal interest rate

03:15 Example of the difference between nominal interest rate and effective interest rate

04:05 nominal interest rate and effective interest rate challenge
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Limor Markman
Real Estate Investor & Money Expert
http://Limor.Money
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Just a reminder, that I’m not a Certified Financial Planner, the content is my opinion only. I’ve made every effort to ensure that the information in my videos has been accurately represented. I do not warrant or represent that the information is accurate, up-to-date, comprehensive, verified or complete. The content has been developed for educational and informational purposes only and is made available to you as self-help tools for your own use; it is not a substitute for professional advice. I shall not be liable for any investment decisions or any other actions taken by you based on information contained in this site.
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Nominal interest rate and effective interest rate
   • WHAT IS A NOMINAL AND EFFECTIVE INTEREST R...