Effective annual rate (APY) from a nominal interest rate and its compounding frequency, including continuous compounding.. Effective Annual Rate Calculator is a free online tool from the ToolsRift Finance & Health Calculators collection. It runs entirely in your browser — nothing to install, no signup, and your data never leaves your device.
Enter the nominal annual rate and choose a compounding frequency, up to continuous. The calculator shows the effective annual rate (APY) for true comparison.
The EAR, or APY, is the true annual return once compounding is included. It is always at least the nominal rate and higher when compounding is more frequent.
EAR = (1 + i/n)^n − 1, where i is the nominal annual rate and n the number of compounding periods per year. For continuous compounding, EAR = e^i − 1.
Two loans or deposits with the same nominal rate can differ if one compounds monthly and another yearly. EAR normalizes them so you compare true annual cost or yield.