Discounted Cash flow Valuation - COMPARING RATES: THE EFFECT OF COMPOUNDING
3 important questions on Discounted Cash flow Valuation - COMPARING RATES: THE EFFECT OF COMPOUNDING
What does Nominal, Stated or Quoted intrest rated mean?
The interest rate expressed in terms of the interest payment made each period. Also known as the stated or quoted interest rate.
What does effective annual percentage rate (EAR) mean?
The interest rate expressed as if it were compounded once per year.
What is the annual percentage rate (APR)?
The harmonized interest rate that expresses the total cost of borrowing or investing as a percentage interest rate.
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