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Briefly describe where deserts develop and why.
Nominal Interest
The rate of interest quoted on a loan or bond without adjusting for inflation or other factors that could affect the real rate of return.
Effective Rate
The actual interest rate on a loan or investment, taking into account the compounding of interest, as opposed to the nominal rate.
Ordinary Annuity
Homogeneous financial installments disbursed at the cessation of individual periods across a confirmed timeline.
Nominal Interest
The interest rate stated on a loan or investment agreement before any adjustments for compounding or inflation.
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