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Compounded Nominal Rate
A nominal rate that is compounded refers to the stated interest rate of an investment or loan, not taking into account the effects of compounding over specific periods.
Effective Rate
The effective rate is the interest rate on a loan or investment, adjusted for the actual number of compounding periods per year, giving a true annual rate.
Compounded Nominal Rate
The rate at which interest is calculated on the initial principal and previously accumulated interest over a specific time period without considering the inflation.
Effective Rate
The annual interest rate on a loan or investment, taking into account the effect of compounding, as opposed to the nominal rate which does not.
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