Financial Real Estate Math - What's the Name for the "Effective" Interest Rate?

Question

I have a math question for you! I'm trying to analyze our portfolio and have gotten into some pretty deep math calculations regarding interest rates and debt payments.

I want to know: is there a name for the percentage, call it "R", that is your total annual loan payment P divided by your total loan amount PV?

I would call it the "effective interest rate" or something like that because R x PV = P. (The effective interest rate times your loan amount equals your annual loan payment).

To say it another way, in the classic loan amount formula below, is there a name for the "rate" R := r/(1-(1+r)^(-n)) circled below in red?

Kim Hopkins · Answer

Someone on my team figured it out! This is called the mortgage constant or the mortgage capitalization rate. More to come... there's a lot this little guy tells you about a deal...

Here's more info on it, in case anyone finds this thread...

https://www.investopedia.com/terms/m/mortgageconstant.asp

Kim Hopkins · Answer

Good point. I shouldn't call it the "effective interest rate". That name is already taken. It should be called the "effective payment rate" or something like that because it gives you the total annual debt payment (including principal). This isn't the same as the effective annual interest rate you mentioned above which is only giving you interest.

Bob Solak · Answer

Well, in the equation, r is the rate per period.

Perhaps you're thinking of nominal vs effective interest rate.  See

https://global.oup.com/us/companion.websites/9780190296902/s....