Effective rate

A measure of the time value of money that fully reflects the effects of compounding. The New York Times Financial Glossary

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effective rate UK US noun [C]
FINANCE an actual rate after everything has been considered, rather than a rate that is planned, offered, etc.: »

Small businesses should benefit from a reduction in the effective rate of capital-gains tax.

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The building society will knock 1.25% off its standard variable rate, giving an effective rate of 4.34%, for houses built to energy-efficient criteria.


Financial and business terms. 2012.

Look at other dictionaries:

  • effective rate — Another name for annual percentage rate that refers to the amount of yearly interest to be charged by a lender on the money borrowed by a debtor. In federal income tax law, the actual tax rate that an individual taxpayer pays based upon his or… …   Law dictionary

  • effective rate — A measure of the time value of money that fully reflects the effects of compounding. Bloomberg Financial Dictionary * * * effective rate effective rate ➔ rate1 * * * effective rate UK US noun [C] ► FINANCE an actual rate after everything has been …   Financial and business terms

  • effective rate — noun of interest : the excess over unity of the accumulation factor for a year, furnishing the rate at simple interest which would yield in one year the same amount as the actual or nominal rate at compound interest * * * effective rate noun… …   Useful english dictionary

  • effective rate — /ɪˌfektɪv reɪt/ noun a real interest rate on a loan or deposit (i.e. the APR) …   Dictionary of banking and finance

  • Effective rate of protection — In economics, the effective rate of protection is a measure of the total effect of the entire tariff structure on the value added per unit of output in each industry, when both intermediate and final goods are imported. This statistic is used by… …   Wikipedia

  • effective rate of return — rate of profit yielded by an investment …   English contemporary dictionary

  • federal funds effective rate — USA federal funds effective rate, Also known as federal funds rate. A floating interest rate reference rate used by a lender under a loan agreement. In general terms, it is the rate per annum equal to the rate charged on federal funds… …   Law dictionary

  • sterling effective rate — see under ↑effect • • • Main Entry: ↑sterling …   Useful english dictionary

  • Rate of fire — is the frequency at which a specific weapon can fire or launch its projectiles. It is usually measured in rounds per minute (RPM or round/min), or per second (RPS or round/s). Contents 1 Overview 2 Measurement 2.1 Cyclic rate …   Wikipedia

  • Effective interest rate — The effective interest rate, effective annual interest rate, Annual Equivalent Rate (AER) 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… …   Wikipedia

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