Effective Rate for One Year
Convert nominal yearly rate and compounding frequency to effective rate.
Your numbers
Actual compounded rate for one year
Estimate for learning with your assumptions; no live rates, tax rules or investment recommendations. Returns fit dey negative and no get guarantee.
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Formula
Use EAR = (1+j/m)^m−1. j na nominal yearly rate as fraction, m na compounding periods per year, and EAR na effective yearly rate as fraction.
Convert nominal yearly rate and compounding frequency to effective rate.
Example wey show the calculation
- Nominal rate for each year (%)
- 12
- How many times interest dey compound per year
- 12
- Actual compounded rate for one year
- 12.6825030132 %
Where e fit work and limits
Estimate for learning with your assumptions; no live rates, tax rules or investment recommendations. Returns fit dey negative and no get guarantee.
We check inputs for missing values and allowed ranges. Result wey pass the finite numeric range no go show. Rounding affect wetin display, while calculation use the model numeric precision.
Check your units and assumptions before you rely on result. Changing label no convert currency or physical unit.
Version of di formula: b77b99339e6f · Example don get check: