What does effective interest rate mean?

That depends on what you DO know. You might consider asking again, being more specific about what information you have. For example, if you know the amount of interest, the principal, and the length...

It means that the rate of interest either charged on a debt or paid on a deposit is percieved as low by some comparable. This may often be quite subjective. Someone who obtained a mortgage in 2004 at...

The percentage of a sum of money charged for it's used.

derivation of this formula r=(1+i/m)m-1

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