💰 Finance
Effective Annual Rate Calculator
A 6% nominal rate compounded monthly is not 6% a year — the interest earns interest, so the true annual cost is higher. The effective annual rate (also called APY or EAR) restates it on a once-a-year basis so products with different compounding frequencies can be compared fairly.
Nominal rate versus effective rate
How it works
Nominal (stated) rate
Compounding frequency
Nominal rate
Effective annual rate
Rate per compounding period
Effective minus nominal
Compounding periods per year
Frequently asked questions
How do I use the Effective Annual Rate Calculator?
Fill in the fields above — the result recalculates instantly as you type. Everything runs in your browser, so the values you enter are never collected or stored.
Is this calculator free?
Yes. It is completely free, requires no account, and works on phones, tablets and desktops.