Equivalent Interest Rate Calculator
Convert a nominal interest rate from one compounding frequency to another while keeping the effective interest rate constant.
Given the periodic nominal rate r compounded m times per per period, the equivalent periodic nominal rate i compounded q times per period is
where r = R/100 and i = I/100.
For example, you have a loan at an annual rate of 4% that compounds monthly (m=12) however your payments are made quarterly (q=4) so your interest will be calculated quarterly. What is the equivalent annual rate that coincides with quarterly compounding? 4.0133%
The effective annual interest rate remains the same.
Cite this content, page or calculator as:
Furey, Edward "Equivalent Interest Rate Calculator" at https://www.calculatorsoup.com/calculators/financial/equivalent-interest-rate-calculator.php from CalculatorSoup, https://www.calculatorsoup.com - Online Calculators
Last updated: November 15, 2023