A measure of the time value of money that fully reflects the effects of compounding. Bloomberg Financial Dictionary
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effective rate UK US noun [C]
► FINANCE an actual rate after everything has been considered, rather than a rate that is planned, offered, etc.: »
Small businesses should benefit from a reduction in the effective rate of capital-gains tax.
»The building society will knock 1.25% off its standard variable rate, giving an effective rate of 4.34%, for houses built to energy-efficient criteria.
Financial and business terms. 2012.