Effective Annual Rate (EAR) Calculator
Effective Annual Rate:
0.00%
Understanding Effective Annual Rate (EAR)
The Effective Annual Rate (EAR) shows the true annual interest rate when considering compound interest. It's essential for:
- Comparing different investment options with varying compounding frequencies
- Understanding the actual return on savings accounts and investments
- Evaluating the true cost of loans and credit
How It Works
The EAR calculator uses the formula: EAR = (1 + r/n)^n - 1, where:
- r = Annual interest rate (as a decimal)
- n = Number of times interest is compounded per year