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
Information that is factual, such as representations made by a real estate broker to a prospective buyer. ...
Hallow masonry wall consisting of an inner and outer wall with dead air space between them. The air space provides increased thermal insulation. Cavity walls are not used in northern ...
Person or business that provides an option to someone else. ...
Geographic location that is gradually being developed as an urban area. ...
Organizational governing group. Either an appointed or elected body overseeing the management of an organization and rendering advice on current issues. Members are legally responsible for ...
The add-on interest is a type of interest that is figured into the total cost of a loan over its entire life. The interest is added to the principal and divided by the number of monthly ...
Literature, samples, equipment, tools, and other useful information that real estate brokers or agents can use for demonstration purposes to prospective buyers. ...
Style of architecture popular during the American Colonial Period. The 2-story house is square or rectangular. The steep gable roof extends down to the first floor in the rear. ...
As you’d expect, the rod has various meanings in everyday discourse. However, lesser-known is that surveyors use a rod as a land survey measurement for real estate. In a nutshell, a ...
Have a question or comment?
We're here to help.