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
Legal proceeding to exercise a right in a disagreement between private individuals or businesses. One party seeks a remedy against the other. It does not involve a criminal situation. ...
Interest a person pays before it is actually incurred. An example is a one year's interest that a borrower agrees to pay in advance to a bank on a mortgage. This rarely occurs. ...
The period when a financial debt, such as a mortgage, must paid. ...
Pipes transporting water. ...
Unrealized gain in value of real property from holding it. The increase value is not recognized in the accounts. When the property is sold there will be a realized gain or loss. ...
Assets owned by an individual as part of his or her estate except for land and everything attached to the land. Personal property may be either tangible, having physical substance such as ...
Probate court approved title issued to the distribute of an individuals intestate estate. ...
Owned by one individual or sole ownership. ...
If you have been wondering what can cause a market failure, the most common answer is externalities. An externality is an indirect cost or benefit to a neutral third party that comes from ...
Have a question or comment?
We're here to help.