The AER is the actual interest rate that an investor will earn for an investment, a loan, or another product, based on compounding. The AER reveals to investors what they can expect to return from an investment (the ROI)—the actual return of the investment based on compounding, which is more than the stated, or nominal, interest rate. Using following Formula -:
Equivalent Interest Rate :
i = q * [(1 + r/m)m/q - 1]
i = Equivalent Interest Rate
r = Interest Rate in decimal form
m = Compounding Periods
q = New Compounding Periods
How to use Equivalent Interest Rate Calculator?
Step by step procedure for Equivalent Interest Rate Calculator is as follows .
Step 1: Input appropriate value .
Step 2: Now click on "Compute" button to get result.
You will get Equivalent Interest Rate as per your value input.