Effective Interest Rate Calculator
Calculate the Effective Annual Rate (EAR) from a nominal interest rate and compounding frequency.
Financial calculations are estimates provided for planning purposes only and do not constitute financial advice. Actual results may vary based on market conditions, tax laws, and other factors. Please consult with a qualified financial advisor before making any investment decisions.
Nominal vs Effective Rate
The nominal rate is the stated interest rate. The effective rate takes comprehensive into account, showing you the true cost of borrowing or the true return on investment.
Formula
EAR = (1 + i/n)^n - 1
Where i = Nominal Rate, n = Compounding Periods.
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