Periodic rate
Periodic rate
Periodic rate is a loan's rate of interest, converted to be applicable to a time period other than one year. Interest rates are normally based on one year, but sometimes it's useful to know the rate to be charged over one week, one month, or one quarter. These are periodic rates, and they're determined by extrapolation. If the rate on a loan is 10 percent, for example, the periodic rate used to calculate one quarter's interest is 2.5 percent.
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