Effective Annual Yield
Definition of "Effective annual yield"
Real rate of interest on a loan. It is the coupon rate divided by the net proceeds of the loan. Assume Sharon took out a $1,000,000, on year, 10% discounted loan to buy real estate. The effective interest rate equals: in this discount loan the proceeds received is only $900,000, which effectively increases the cost of the loan. The effective annual yield, also called the annual percentage yield (APY). Different kinds of investments have different compounding periods. For example, some banks pay interest quarterly. If an investor wants to compare investments with different compounding periods, she must place them on a common basis. It is used for this purpose and is computed as follows.
Popular Real Estate Terms
Compared to; relative to; against. ...
Traditional style borrowed from the British Georgian architecture in the American colonial period. Colonial architecture usually has two stories emphasizing window detail and shutters. ...
Within Real Estate, “nuisance” is a term used to describe any disturbance that might affect neighboring houses. Nuisance abatement is the enforcing of policies and codes that ...
House that can be bought at a low price because it is in poor condition. A buyer who is handy may find it attractive because he can personally make the needed repairs without hiring others. ...
Securing lease commitments to a building prior to its being available for occupancy. For example, a developer offers a discounted lease to potential tenants providing they agree to sign a ...
Economic policies designed to reduce the fluctuation in the business cycle. An example is Federal reserve monetary policies. An attempt by an underwriter to prevent a market price of a ...
The person giving property or establishing a trust. ...
The definition of a closed-end lease is what happens when an individual rents or leases an asset at a monthly rate with no obligations for the lessee to purchase the asset that he rents at ...
Rights allowing an insurer to act against a negligent third party to receive reimbursement for payments made to an insured. ...
Have a question or comment?
We're here to help.