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Online Effective Interest Rate Calculator

Nominal annual rate and compounding periods per year. Get effective annual rate (EAR) as a percentage.

Frequently Asked Questions

What is effective annual rate?
The true annual rate after compounding. EAR = (1 + nominal/n)^n - 1, expressed as a percentage.
Why is EAR higher than nominal?
When interest compounds more than once a year, you earn interest on interest, so the effective rate exceeds the stated nominal rate.
Same as APY?
Yes. APY (Annual Percentage Yield) is the effective rate for savings/investments; APR is often nominal.

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