This calculator can help with the following tasks:
| Effective Annual Rate: | 5.00% |
| Nominal Rates: | |
| Compounding frequency | Nominal Annual Rate |
| Annually | 5.00% |
| Semiannually | 4.939015% |
| Quarterly | 4.908894% |
| Monthly | 4.888949% |
| Biweekly | 4.883597% |
| Weekly | 4.881306% |
| Daily | 4.879343% |
| Continuously | 4.879016% |
To calculate an effective annual interest rate (EAR) for the given nominal annual rate:
To compare nominal annual interest rates with different compounding periods / frequencies:
To calculate a nominal annual interest rates for the given effective annual rate (EAR):
Compounding frequencies supported by this converter:
| Annually | once / year |
| Semiannually | twice / year |
| Quarterly | 4 / year |
| Monthly | 12 / year |
| Biweekly | 26 / year |
| Weekly | 52 / year |
| Daily | 365 / year |
| Continuously | continuous |
Provided values are estimates only and may not apply to your specific situation. Users should not rely on this calculator to make any financial decisions. For an exact determination please contact a professional financial advisor or your financial institution.
This converter relies on the following interest rate definitions:
Nominal Annual Rate of interest is an interest rate that is quoted annually but with a compounding period other than one year. For example: "annual interest rate of 6% payable monthly". If a nominal annual interest rate compounded m times per year is defined as Rm, then the effective rate of interest for the compounding period is rm = Rm / m. In the previous example m = 12, R12 = 6%, and the monthly effective rate r12 = 6% / 12 = 0.5%.
Effective Annual Rate (EAR) of interest is an actual percentage of interest that is paid or received at the end of one year
period on money borrowed or invested. The EAR takes into account the effect of interest compounding.
For a nominal annual rate of Rm compounded m times per year the equivalent EAR is
R = ( 1 + Rm / m )m - 1,
or R = ( 1 + rm )m - 1.
Annual Percentage Rate (APR) of interest takes into account interest compounding as well as any additional fees and charges required to obtain the loan. It expected to reflect the overall ("true") cost of borrowing for a particular financial product (loan, mortgage, etc.). APR depends on the quoted interest rate, the amount borrowed, the loan/mortgage terms, and the amount of related fees and charges. For example, a bank may describe APR om a mortgage as follows: "5.27% APR. Available on the 3-year fixed mortgage. The Annual Percentage Rate (APR) is based on a $350,000 mortgage, 25-year amortization and an appraisal fee of $300".
EFFECT(nominal_rate, periods_per_year) calculates the annual effective interest rate given the nominal rate and number of compounding periods per year.
NOMINAL(effective_rate, periods_per_year) calculates the annual nominal interest rate given the effective rate and number of compounding periods per year.
For more detailed description see the documentation:
Disclaimer
The Authors of this web site offer the information contained within this web site without consideration and
with the reader's understanding that there's no implied or expressed suitability or fitness for any purpose.
Information provided is for informational purposes only and should not be construed as rendering professional
advice of any kind. Before relying on the material in any important matter, readers should carefully evaluate the accuracy,
completeness and relevance of the information for their purposes, and should obtain appropriate expert advice relevant
to their particular circumstances. Usage of this web site's information is solely at reader's own risk.
Links to external web sites are inserted for convenience only and do not constitute endorsement of any information, product or services at those sites.
We expressly disclaim responsibility to any person or entity for any liability, loss, or damage caused or alleged to be caused directly or indirectly as a result of the use, application or interpretation of any material provided on this web site.