Express the term Effective interest rate per payment period, quarterly payments with weekly compounding?
The term Effective interest rate per payment period is the interest rate that is computed for compounding over a given period viz. monthly, quarterly, weekly and daily.
In simple words, it is that rate at which an investor can earn or pay in a year after considering compounding.
The Effective interest rate is also known as The Effective Annual interest rate, Effective rate or Annual Equivalent Rate.
Further, Quarterly payments with weekly compounding would mean that For all the Quarterly Payments, the interest amount will be added to the principal amount for next 52 days.
Where i = Stated annual interest rate,
n = Number of Compounding Periods.
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