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Period Interest Rate per Payment

Period interest rate per payment is used to determine the interest rate to charge to each payment. This is important when the compounding frequency does not match the payment frequency. Use the period interest rate per payment calculator below to solve the formula.

Period Interest Rate per Payment Definition

Period Interest Rate per Payment is the rate of interest that is charged to every payment when the frequency of payments does not equal the compounding frequency.

Variables

K=Nominal annual interest rate
N=Number of payments per year
M=Number of compounding periods per year

 


Period Interest Rate per Payment Formula

 




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