How this calculator works
A nominal annual rate is divided across compounding periods. EAR measures the full-year growth after retaining every interest credit. Reverse modes recover the nominal rate from EAR or start with a periodic rate. For continuous compounding the quoted rate is a force of interest, so there is no discrete periodic-rate output. This page combines the equivalent EAR and EIR tools.
Formula
EAR = (1+j/m)^m - 1; j = m[(1+EAR)^(1/m) - 1]; i = j/m. Continuous: EAR = exp(j) - 1. Balance after t years = P(1+EAR)^t.
Worked example
12% nominal compounded monthly gives 1% per month and 12.682503% EAR. A 21% effective annual rate is equivalent to 20% nominal compounded semi-annually.
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Frequently asked questions
Are EAR and EIR different in this calculator?
They refer to the same effective annual growth measure. Accounting uses of effective interest may include cash-flow or transaction-cost adjustments beyond this tool.
Is this a regulatory APR calculation?
No. APR disclosures can incorporate fees and prescribed timing rules. This is a rate-equivalence calculation.
Does the projected balance include deposits?
It compounds only the initial balance. Use the compound growth tool for recurring contributions.