Effective Annual Rate Calculator

About this calculator

This calculator converts a nominal annual rate (APR) into the effective annual rate (EAR) that accounts for compounding: EAR = (1 + i/n)^n − 1, where i is the nominal rate and n is the number of compounding periods per year (monthly, daily, etc.). The more frequently interest compounds, the higher the effective rate climbs above the nominal one.

Borrowers and savers use it to compare loan offers, credit cards, or savings accounts that quote the same nominal rate but compound at different frequencies, since the effective rate is what actually accrues over a year. Enter the nominal rate and compounding frequency to see the true annual cost or return.