Money & shopping
Effective annual rate calculator
Compare a nominal annual rate with its compounded annual equivalent.
A clear answer. Here’s how.
Effective annual rate = (1 + nominal annual rate / periods)^periods − 1. Assumes equal compounding periods and no fees or balance changes. This arithmetic equivalent does not determine a product’s regulated APR or APY disclosure.
See a worked example
Worked example
A fixed demonstration, separate from the values you enter above.
- Nominal annual interest (%)
- 5
- Compounding periods per year
- Monthly
Example result
- Effective annual rate
- 5.11618978817%