### What Is Effective-Annual-Rate?

The Effective Annual Rate is an important tool that allows the evalution of true return on an investment or true interest rate on a loan.
Effective Annual Rate is the rate of interest that an investor can earn in a year after taking into consideration compounding , such as Continuously , Daily , Monthly , Bi-Monthly , Semi-Monthly , Weekly , Bi-Weekly , Quterly , Yearly , Semi-Yearly etc .

** Effective Annual Rate Formula:**

i = (1 + r / m)^{m} - 1

Where

i = Effective Annual Rate in decimal form

I = i * 100

I = Effective Annual Rate in percent

m = Compounding Periods

R = Rate of interest per period in percent

r = Interest Rate in decimal form

### How to use Effective Annual Rate Calculator?

Step by step procedure for Effective-Annual-Rate Calculator is as follows.

**Step 1: **Input appropriate value .

**Step 2: **Now click on "Compute" button to get result.

You will get Effective Annual Rate as per your value input.