The Effective Annual Rate (EAR) is the rate of interest actually earned on an investment or paid on a loan as a result of compounding the interest over a given period of time. It is usually higher than the nominal rate and is used to compare different financial products that calculate annual interest with different compounding periods – weekly, monthly, yearly, etc. Increasing the number of compounding periods makes the effective annual interest rate increase as time goes by.
This App will help you to know Effective Annual Rate with other Several payment frequencies like Semi-Annually, Quarterly (4 payments), Monthly (12 payments), Daily (365 payments).
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