Effective Interest Rate or EIR is also called Effective Annual Interest Rate, Annual Interest Rate, and subtly, Effective Rate, or Annual Effective Rate.
The actual profit or return that the ‘debt giver' receives when the compounding interest and the fees in the case of financial products are taken into consideration is termed as Effective Interest Rate.
Consider a loan taken by you or any credit or investment you have made, like buying a car. After reading this content, you can figure out how to calculate effective interest rate on a loan, car loans, and other such loans.
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