Find the effective annual rate of a loan or deposit with periodic compounding.
Please do not make financial decisions based on these results.
What is the EAR Calculator?
Find the effective annual rate of a loan or deposit with periodic compounding. To use the EAR Calculator, enter stated annual rate, compounding periods per year; it returns effective annual rate, extra over stated rate, and shows them instantly as you type.
Where the EAR Calculator fits
Find the effective annual rate of a loan or deposit with periodic compounding. The main figure it returns is the Effective annual rate, worked out from the values you enter.
It belongs with the other investment tools. If you are comparing options or checking a result from another angle, try the FD Calculator — Fixed Deposit Calculator, CAGR Calculator (Compound Annual Growth Rate) or the APY Calculator.
How to use the EAR Calculator
- Enter your numbers. The inputs are Stated annual rate (%), Compounding periods per year. Use a rate of return you consider realistic; small changes compound into large differences. Fields marked optional can stay at zero.
- Read the result. The highlighted box gives the Effective annual rate, and the cards below show Extra over stated rate. Tables and charts break it down further.
- Test other scenarios. Results update as you type. Change one value at a time to see what drives the answer, and press Reset to go back to the defaults.
Formula and how it works
Example with real numbers
Here is the EAR Calculator using the default values shown in the calculator above:
Inputs
| Stated annual rate (%) | 12 |
|---|---|
| Compounding periods per year | 12 |
Results
| Effective annual rate | 12.68% |
|---|---|
| Extra over stated rate | 0.68% |
With these inputs the calculator returns Effective annual rate: 12.68%. Change any value in the calculator to see how the result moves.
What if you change one input?
Sensitivity check: raising Stated annual rate (%) from 12 to 14.4 (about 20% higher) and leaving everything else as in the example above changes the results like this:
| Result | Example | After the change | Change |
|---|---|---|---|
| Effective annual rate | 12.68% | 15.39% | +21.3% |
| Extra over stated rate | 0.68% | 0.99% | +45% |
The input that moves the result most is the one to check twice. Change it in the calculator above to test your own case.
What the results tell you
The results panel of the EAR Calculator reports Effective annual rate and extra over stated rate. Compare these figures while changing one input at a time, and use the related calculators below to look at the same situation from another angle.
Method and limits. This calculator applies the formula in the section above to your inputs, in your browser; nothing you enter is stored on our servers. Investment returns are not guaranteed. The result shows what the numbers you enter would produce, not what the market will do. It is for information, not financial, tax or legal advice.
Frequently asked questions
Why is EAR higher than the stated rate?
Interest earns interest within the year, which lifts the effective rate above the stated rate.
How often does interest compound?
You choose it in the compounding field of this calculator: daily, weekly, monthly, quarterly, semiannual, annual or continuous.
Are investment returns guaranteed?
No. Real returns vary. Use these tools to compare scenarios, not to predict results.
Are the results guaranteed?
No. Results depend entirely on the numbers you enter and the formulas shown on this page. Please do not make financial decisions based on them alone; confirm important figures with a licensed professional.
Related investment calculators
- FD Calculator — Fixed Deposit Calculator
- CAGR Calculator (Compound Annual Growth Rate)
- APY Calculator
- Effective Interest Rate Calculator
- Interest Rate Calculator
- Savings Calculator
- Sinking Fund Calculator
- Present Value Calculator
- Equivalent Rate Calculator – AER
- Discount Rate Calculator
- CD Calculator
- Bond Calculator