Effective Interest Rate Calculator
Turn a nominal interest rate into its effective annual rate, and into the equal rate under a different compounding schedule.
Effective annual rate
12.6825%
- Equivalent nominal rate
- 12.1204%
- Equivalent rate per period
- 3.0301%
Show the work
Effective annual rate
((1 + r ÷ n) to the power of n − 1) × 100
((1 + 0.12 ÷ 12) to the power of 12 − 1) × 100 = 12.6825%
Estimates for general information only — not financial advice.
How it works
Effective annual rate = (1 + r ÷ m)^m − 1; the equivalent nominal rate with k periods = k × ((1 + EAR)^(1/k) − 1)
Questions
- How does the effective interest rate calculator work?
- Effective annual rate = (1 + r ÷ m)^m − 1; the equivalent nominal rate with k periods = k × ((1 + EAR)^(1/k) − 1).
- What do I need to enter?
- Nominal annual rate, Compounded, Convert to compounding. Optional fields can be left blank.
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