Effective annual interest rate calculator
Convert a monthly interest rate into an effective annual rate using compounding. Understand the difference between this conversion and a fee-inclusive credit APR.
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Effective annual interest rate
Inputs changed. Select Calculate result to update your estimate.
Compounding conversion only. This is not a regulated APR quote: fees, timing and credit agreement terms are excluded.
How the effective annual interest rate calculator works
Effective annual rate = ((1 + monthly rate ÷ 100)^12 − 1) × 100%.
Data basis: mathematical formula using your inputs. Example prices and rates are illustrative, not current market quotes.
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Worked example: effective annual rate
This illustration uses the calculator’s example inputs. It is not a quote or a recommended financial decision.
- Monthly interest rate (%)
- 1.5
Effective annual interest rate: 19.56%
Effective annual rate = ((1 + monthly rate ÷ 100)^12 − 1) × 100%.
Effective annual rate: questions answered
Is the effective annual rate a regulated APR quote?
No. This is an interest compounding conversion. Regulated APR can include fees and specified cash-flow timing, which are not modelled here. Use your credit agreement for the quoted APR.
Using your result
Example inputs are a starting point. Replace them with your figures and select Calculate result. Results are rounded for display; calculations use unrounded values.
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