Effective Interest Rate (EIR) is Important


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Effective Interest Rate (EIR) is Important

Financial Calculators require you to know the effective interest rate (EIR) to calculate either the PV or FV if the Number of Periods is in years. One of the advantages of the negative amortization schedules shown below is that it shows you all the Future Values in a grid format for a cash flow for a mortgage or loan. Accountants like this as they can do a negative amortization schedule once and have all the future Values at their finger tips. They also dont have to fiddle with the tedious compounding procedure on the calculator in order to calculate the EIR. The MORTGAGE2 PRO program automatically does the EIR inside the SPREADSHEET.

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