All calculators / Time value of money
Effective annual rateAnalyst
The true yearly rate once compounding is included.
What you’ll enter
- Nominal annual rate
- Compounding periods per year
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The formula
EAR = (1 + r ÷ m)^m − 1
Two loans with the same nominal rate cost different amounts if one compounds more often. Continuous compounding is the upper limit: eʳ − 1.