Effective Annual Interest Rate Calculator
See what a nominal rate really costs once compounding is included.
Result
How to use
- Enter your values in the fields above.
- Press Calculate to see your result instantly.
- Use the Share button to copy a link to your result.
About this calculator
The effective annual rate (EAR), also called the annual percentage yield (APY), converts a nominal interest rate into the true annual rate once compounding is taken into account, using EAR = (1 + i/n)^n − 1, where i is the nominal annual rate and n is the number of compounding periods per year.
Two loans or savings accounts quoting the same nominal rate can have different real costs or returns if one compounds monthly and the other daily — EAR strips out that difference so rates can be compared on equal footing. This calculator takes a nominal rate and compounding frequency to compute the effective annual rate.
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