Convert between AER and a nominal rate for any compounding frequency.
Please do not make financial decisions based on these results.
What is the Equivalent Rate Calculator – AER?
Convert between AER and a nominal rate for any compounding frequency. To use the Equivalent Rate Calculator – AER, enter aer, compounds per year; it returns equivalent nominal rate, monthly equivalent rate, daily equivalent rate, and shows them instantly as you type.
Where the Equivalent Rate Calculator – AER fits
Convert between AER and a nominal rate for any compounding frequency. The main figure it returns is the Equivalent nominal 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 APY Calculator, Effective Interest Rate Calculator or the Interest Rate Calculator.
How to use the Equivalent Rate Calculator – AER
- Fill in the fields. You will need AER (%), Compounds 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 Equivalent nominal rate, and the cards below show Monthly equivalent rate, Daily equivalent 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 Equivalent Rate Calculator – AER using the default values shown in the calculator above:
Inputs
| AER (%) | 5 |
|---|---|
| Compounds per year | 12 |
Results
| Equivalent nominal rate | 4.89% |
|---|---|
| Monthly equivalent rate | 0.41% |
| Daily equivalent rate | 0.0134 |
With these inputs the calculator returns Equivalent nominal rate: 4.89%. Change any value in the calculator to see how the result moves.
What if you change one input?
Sensitivity check: raising AER (%) from 5 to 6 (about 20% higher) and leaving everything else as in the example above changes the results like this:
| Result | Example | After the change | Change |
|---|---|---|---|
| Equivalent nominal rate | 4.89% | 5.84% | +19.5% |
| Monthly equivalent rate | 0.41% | 0.49% | +19.5% |
| Daily equivalent rate | 0.0134 | 0.016 | +19.4% |
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 Equivalent Rate Calculator – AER reports Equivalent nominal rate, monthly equivalent rate and daily equivalent 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
What is AER?
Annual equivalent rate is the UK name for APY: the yearly rate after compounding.
What is the difference between simple and compound interest?
You choose it in the compounding field of this calculator: daily, weekly, monthly, quarterly, semiannual, annual or continuous.
What rate of return should I assume?
There is no guaranteed rate. Test a range of conservative and optimistic rates, and remember that fees and inflation reduce your real return.
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
- APY Calculator
- Effective Interest Rate Calculator
- Interest Rate Calculator
- CAGR Calculator (Compound Annual Growth Rate)
- Rate of Return Calculator
- Compound Interest Rate Calculator
- Real Rate of Return Calculator
- Finance Calculator
- Simple Interest Calculator
- IRR Calculator
- Annualized Return Calculator
- Discount Rate Calculator