Effective Interest Rate Calculator
Convert nominal interest into an effective annual rate.
Effective annual rate
6.1678%
Periodic rate
0.5%
Formula
EAR = (1 + nominal rate / periods)^periods - 1.
Convert nominal interest into an effective annual rate so rates with different compounding frequencies are easier to compare.
How to Use
Convert nominal interest into an effective annual rate so rates with different compounding frequencies are easier to compare. Enter the Nominal rate and Compounding periods values and review the Effective annual rate and Periodic rate outputs after you calculate.
- Open the calculator : Start with Effective Interest Rate Calculator.
- Enter values : Fill in the required inputs and any optional settings.
- Review the result : Read the output and use the about page for more detail if needed.
Common Questions
What formula does the Effective Interest Rate Calculator use?
EAR = (1 + nominal rate / periods)^periods - 1.