Calculate the effective annual rate considering compounding.
Annual percentage rate before compounding
How often interest is compounded per year
Investment period in years (for comparison)
Annual Percentage Yield (APY)
| Frequency | Periods/Year | Effective Rate | $10k Growth |
|---|---|---|---|
The actual annual rate of return, accounting for compounding frequency. Also known as Annual Percentage Yield (APY).
The stated annual interest rate without considering compounding effects.
How often interest is calculated and added to the principal. More frequent compounding results in higher effective rates.
EAR allows accurate comparison between investments with different compounding frequencies.
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