Equivalent Interest Rate

Convert an interest rate from one compounding frequency to another — useful when comparing products with different payment schedules.

Rate Conversion

Results

Equivalent Rate

Effective Annual Rate

Periodic Rate (Target)

Formula

EAR = (1 + r/n)^n - 1

Equivalent Rate = n2 x [(1 + EAR)^(1/n2) - 1]

The effective annual rate is first computed from the source, then converted to the target compounding frequency.

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