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Nominal vs. Effective Interest Rates

Posted by Bill Campbell III, CFA on December 9, 2013
Posted in: Level I Quantitative Methods, Level II General.

The ideas behind nominal and effective interest rates are fairly simple, but you need to be sure that you understand the differences, and that you know which convention is used for which common rate quotes.  At the heart of the difference is the idea of compound interest, so let’s start there.  Throughout this article, we’ll […]

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