Positive feedback is a process that occurs in a feedback loop in which the effects of a small disturbance on a system include an increase in the magnitude of the perturbation. That is, A produces more of B which in turn produces more of A.
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The Effective interest rate or annual equivalent rate (AER) is the calculations of interest rate on the loan or certain investments or financial product if compounding happens more than one in a year, then the nominal interest rate restates as an interest rate on all debts.
Effective interest rate differs from two different areas from annual percentage rate,
The calculation of Effective interest rate is defined by the equation, which is
Advanced Algebra with the TI-84 Plus Calculator By Brendan Kelly (published by Brendan Kelly Publishing Inc., 2007)
Corporate Finance By Peter Moles, Robert Parrino, David S. Kidwell (published by John Wiley & Sons, 2011)
Here are two of practical examples that cater a good quality notion on the Effective interest rate,
(1 + .12/12)12 - 1 = .12683 or 12.683%
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