Effective Interest Rate Definition | Becker
Accounting Dictionary
Effective Interest Rate
- The effective or market interest rate is the rate of interest actually earned by the bondholders and is the rate of return for comparable bonds at the date of issuance. See also stated interest rate and par value (of a bond) and discount and premium and bond selling price. The internal rate of return or yield to maturity of a bond at the time of issue.
Related Terms:
Par Value (of a Bond) [FAR]Discount [FAR]Premium [FAR]Bond Selling Price [FAR]Stated Interest Rate [FARBAR]Back to Dictionary