The effective rate is the interest rate you actually pay or receive, as opposed to the stated rate. For example, an 8% stated rate paid annually on a $1,000 investment is $80 per year. However, if interest is paid quarterly, you will receive $82.40 a year. So, the effective annual rate is 8.24% per year. Read the fine print, where effective rates are generally disclosed. (more…)

Maybe you are a little bit confused for so many are many phrases, terms, and abbreviations used in the financial sector. Most of them are not relevant to you or anything that interest you. There is a certain degree that you must understand some of financial jargon. One of these conditions is short and is probably the most important call you have to learn, because it directly applicable to you and shown on your loan papers. APR, short for Annual Percentage Rate is a the most common term that you see in loan company advertisement. So what is that means? Is the term apply to you? (more…)