FINANCIAL
Effective Annual Rate Calculator
Convert a nominal annual rate into its compounded annual equivalent.
Your result
FINANCIALEnter your values and select calculate.
On this page How it works & practical examples
How to use the Effective Annual Rate Calculator
Use a nominal rate whose compounding frequency matches the contract. This tool converts rate conventions rather than projecting a starting balance.
The calculation
Effective annual rate = [(1+nominal/m)^m − 1] × 100
Worked example
12% nominal compounded monthly has an effective annual rate of about 12.6825%.
Assumptions and limits
Fees, cash-flow timing and taxes are excluded; this is not an APR disclosure. Negative rates are supported within the entered domain.
Common questions
Which inputs should I use?
Use a nominal rate whose compounding frequency matches the contract. This tool converts rate conventions rather than projecting a starting balance.
What does the result exclude?
Fees, cash-flow timing and taxes are excluded; this is not an APR disclosure. Negative rates are supported within the entered domain.