How to Calculate Effective and Equivalent Interest Rates
Автор: MATH MADE EASY WITH LAUREL
Загружено: 2025-10-03
Просмотров: 267
In this lesson, learn the difference between effective interest rates and nominal interest rates — and how to calculate them using compound interest formulas. We will also discuss how to find equivalent interest rates. We’ll cover what these rates mean, why they’re important in finance, and walk through clear examples step by step.
By the end of this video, you’ll understand how to:
✅ Calculate the effective annual rate (EAR) from a nominal rate
✅ Convert between different compounding periods
✅ Determine equivalent interest rates across compounding intervals
✅ Apply these concepts to real-world business and investment problems
Whether you’re studying business math, financial math, or preparing for exams, this tutorial will make effective and equivalent rates easy to understand!
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