This Effective Annual Interest Rate Calculator is an online tool specially programmed to calculate the Effective Annual Interest Rate based on the input values of Interest Rate, Monthly Compounding, Quarterly Compounding, Semi-Annually Compounding and Annual Compounding Period on loan
An Effective Interest Rate is also known as effective annual interest rate, AER - annual equivalent rate and expressed as a percentage in yearly basis. This is the nominal interest rate which includes interest, compounding and other fee components cumulatively calculated across the year to represent the resultant interest rate. Generally, the Effective interest rate is directly proportional to compounding frequency. If the compounding frequency is higher than the AER will be higher. Effective Interest Rate is an instrument and the calculation is more useful to comparing loan programs with different interest rates, compounding frequency and other charges. When it comes to online calculation, this online Calculator may assist you to make your calculations easy. Hence you can determine which loan provider provides you the best interest rate by comparing loans with different aspects.