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Tip of the Day

Tip of the Day Buy Homeowner and Auto Coverage from the Same Insurer

Buy Homeowner and Auto Coverage from the Same Insurer - When purchasing insurance it is always wise to take out all your insurance needs through one insurance company, agent, as...

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Effective Annual Rate (EAR)

Definition: The actual interest rate when accounting for compounding.  It is calculated as follows:

EAR = [1 + (i/n)]^n - 1; where

i = stated annual interest rate
n = number of compounding periods

Advice: The concept of EAR is crucial to understand if you carry a credit card balance.  The interest you would have to pay is higher than what the APR indicates.  For example, a 10% APR compounded daily results in an EAR of 10.51%.  A 30% APR compounded daily would result in an EAR of 35%!

 

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Definition of the Day Critical Mass

Critical Mass - the critical mass is the size a market or company has to attain before it is considered a fundamental change in operation...  Critical mass is a milestone in a company’s success because it is said that when a company reaches critical mass, it’s able to sustain itself...

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