Stated Annual Interest Rate
The annual rate of interest that does not account for compounding occurring within the year. Investopedia Says:
Consider a stated annual rate of 10%. Compounded yearly this rate will turn $1000 into $1100. However, if compounding occurs monthly, $1000 would grow to $1104.70 by the end of the year, rendering an effective annual interest rate of 10.47%. The stated annual interest rate does not include the effects of intra year compounding while the effective annual interest rate does. Related Terms:
Compounding
Effective Annual Interest Rate
Fixed Interest Rate
Interest Rate Ceiling
Nominal Interest Rate
Real Interest Rate
Variable Interest Rate |