Name: Effective Rate
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Effective Rate

Tags: #Economics

$$r_{e} = (1 + \frac{r}{m})^{m} - 1 \\ r_{e} = e^{r} - 1$$

                                 r_{e} = (1 + \frac{r}{m})^{m} - 1 \\
r_{e} = e^{r} - 1

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$r_{e} = (1 + \frac{r}{m})^{m} - 1 \\ r_{e} = e^{r} - 1$

            r_{e} = (1 + \frac{r}{m})^{m} - 1 \\
            r_{e} = e^{r} - 1

Latex code for the Effective Rate. I will briefly introduce the notations in this formulation.

$r_{e}$ : Effective Rate
$r_{e} = (1 + \frac{r}{m})^{m} - 1$ : Compute the effective rate if your loan/investment is compounded m times per year.
$r_{e} = e^{r} - 1$ : Compute the effective rate if your loan/investment is compounded continuously.

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