Effective Annual Rate Calculator
Convert a nominal annual interest rate into a rate including periodic compounding.
Example result
The rate excludes fees and is not a jurisdiction-specific APR calculation. Continuous compounding is not modeled.
How to calculate it
The rate excludes fees and is not a jurisdiction-specific APR calculation. Continuous compounding is not modeled.
Worked example
This is an illustrative scenario, not a market benchmark. Select “Reset to example” to reproduce it in the calculator.
- Nominal annual interest rate
- 12 %
- Compounding periods per year
- 12 periods
Effective annual rate: 12.68%
Effective Annual Rate FAQ
Why is the effective rate above the nominal rate?
With multiple compounding periods, interest itself earns interest during the year.
What does this calculation leave out?
The rate excludes fees and is not a jurisdiction-specific APR calculation. Continuous compounding is not modeled.
Are my inputs saved or sent to a server?
Calculations run in your browser. We do not send your inputs or results to our server or analytics. A comparison stays in this tab until it is refreshed. A CSV is saved only when you choose to download it. See our privacy policy for ordinary hosting and optional analytics data.
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