Accrual Rate

One word that is often seen in a financial context but not used much elsewhere is the word accrual.

But just what is accrual and what does it mean?

Well this refers to the annual rate at which the interest on a particular financial entity is to be calculated. It could be adjustable or fixed.

There are other names for this rate too, such as coupon rate and note rate. There is usually some sort of market index that is used to work out what the accrual rate is (specifically, an independent index).

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