Calculator For Effective Interest Rate


Calculate
Nominal Rate (R) %
Compounding (m)
Number of Periods (t)
 




Effective Interest Rate is used to compare the interest rates between loans with different periods , such as per period , for t Period , for Compounding Period . Using following formula -:

Effective Interest Rate per Period:

i = (1 + r / m)m - 1
Where
i = Effective Interest Rate in decimal form
I = Effective Interest Rate in percent
m = Compounding Periods
R = Rate of interest per period in percent
r = Interest Rate in decimal form

Effective Interest Rate for t Periods:

it = (1 + i)t - 1
Where
i = Effective Interest Rate in decimal form
t = Time Periods

Effective Interest Rate per Compounding Period:

P = R / m
Where
m = Compounding Periods
R = Rate of Interest per Period in Percent