Calculate effective annual rate (EAR) from nominal rate and compounding frequency — see EAR, APY and periodic rate.
Calculate effective annual rate (EAR) from nominal rate and compounding frequency — see EAR, APY and periodic rate.
Enter values above and click Calculate — results will appear here with the formula explained.
Effective rate accounts for compounding. More frequent compounding raises effective rate slightly above nominal. APY is same as EAR for deposits.
Use EAR to compare loans with different compounding: 6% monthly vs quarterly have slightly different EAR.
For YMYL decisions, verify with authoritative sources (CFPB, IRS, WHO, or a licensed professional) and run conservative vs optimistic scenarios. This tool is educational, not professional advice — it assumes constant inputs and excludes fees, taxes and variability that affect real outcomes.
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Effective rate accounts for compounding. More frequent compounding raises effective rate slightly above nominal. APY is same as EAR for deposits. Formula: EAR = (1 + nominal/m)^m -1 where m=compounding frequency
Effective Interest Rate Calculator computes calculate effective annual rate (ear) from nominal rate and compounding frequency — see ear, apy and periodic rate. Formula: EAR = (1 + nominal/m)^m -1 where m=compounding frequency. Example: With 6% nominal monthly: EAR = (1+0.
Calculate effective annual rate (EAR) from nominal rate and compounding frequency — see EAR, APY and periodic rate. Formula: EAR = (1 + nominal/m)^m -1 where m=compounding frequency
| Field | What to enter |
|---|---|
| Nominal annual rate (%) | e.g. 6 |
| Compounding per year | Enter a value |
All fields use the exact formulas shown below — results include step-by-step breakdowns you can verify by hand.
Effective rate accounts for compounding. More frequent compounding raises effective rate slightly above nominal. APY is same as EAR for deposits.
Use EAR to compare loans with different compounding: 6% monthly vs quarterly have slightly different EAR.
For YMYL decisions, verify with authoritative sources (CFPB, IRS, WHO, or a licensed professional) and run conservative vs optimistic scenarios. This tool is educational, not professional advice — it assumes constant inputs and excludes fees, taxes and variability that affect real outcomes.
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With 6% nominal monthly: EAR = (1+0.06/12)^12 -1 =6.1678%. With quarterly: 6.136%.
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