The nominal rate or stated rate is also referred to as effective annual rate (EAR).

Name: The nominal rate or stated rate is also referred to as effective annual rate (EAR).
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Question

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The nominal rate or stated rate is not the same as the effective annual rate (EAR). The nominal rate is the interest rate stated on a loan or investment agreement, while the EAR takes into account the effect of compounding within a year.

The Nominal Rate or Stated Rate Is Also Referred to as Effective