Effective Annual Rate (EAR) Calculator
Parameter | Description | Example Value |
---|---|---|
Nominal Interest Rate | The stated annual interest rate. | 5% |
Compounding Periods per Year | The number of times the interest is compounded per year. | 4 |
Effective Annual Rate (EAR) | The interest rate expressed as if it were compounded once per year (1 + (Nominal Interest Rate / Compounding Periods per Year))^Compounding Periods per Year – 1. | 5.09% |