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by rjtavares
4918 days ago
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It isn't wrong, it's just a convention in finance. The Nominal Annual Rate is presented "without adjustment for the full effect of compounding" [1]. In the provided example, a 100% nominal annual rate becomes a 125% effective annual rate, since it is credited twice in the year. [1] http://en.wikipedia.org/wiki/Nominal_interest_rate#Nominal_v... |
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