equivalent annual rate


Also found in: Acronyms.

equivalent annual rate

[i′kwiv·ə·lənt ¦an·yə·wəl ′rāt]
(industrial engineering)
A measure used in setting up a monthly rate on a comparable basis for each of the months regardless of their variation in working days, or for making the rate comparable with an annual rate regardless of the variation in working days during each month.
References in periodicals archive ?
Each one charges you interest at an annual percentage rate (APR)or equivalent annual rate (EAR), which allows you to make a basic assessment of how much each type of credit will cost.
To illustrate, the first table below shows tax-free equivalent annual rates of return.
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