Nominal interest rate: Difference between revisions

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===Daily compounding===
A loan with daily comp have a substantially higher rate in effective annual terms. For a loan with a 10% nominal annual rate and daily compounding, the effective annual rate is 10.516%. For a loan of $10,000 (paid at the end of the year in a single [[lump sum]]), the borrower would pay $416,0051.56 more than one who was charged 10% interest, compounded annually.
 
== References ==