For example, if the interest rate given is the effective annual interest rate, but cash flows are received (and/or paid) quarterly, the interest rate per quarter must be computed.
The interpretation is that for an effective annual interest rate of 10%, an individual would be indifferent to receiving $1000 in 5 years, or $620.92 today.
The monthly sum interest crediting method tracked each month (subject to a cap each month) and the results from each month are summed to get the annual interest rate credited.
In it he argued for a reduction of the highest permitted annual interest rate, from 10%, presenting a case from other countries where the limit was 6%.