Examlex
A taxonomy is best defined as
Lump Sum
A one-time payment executed at a specific moment, rather than several installments spread out over a period.
Nominal Rate
The advertised or stated interest rate on a loan or investment, not taking into account the effect of compounding or inflation.
Monthly Compounding
The process where interest earned is added to the principal sum every month, so that from that moment on, the interest that has been added also earns interest.
Effective Interest Rate
Represents the real cost of borrowing or the real yield on an investment, accounting for compounding periods within a year.
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