This tool converts an interest rate from one compounding frequency to another — for example, turning a monthly compounded rate (APR) into its equivalent annual rate (APY), or the reverse. It's the calculation banks and lenders use to compare loans, savings accounts, or credit cards that quote interest differently, so you can see which one is actually cheaper or pays more.
Say a savings account advertises 6% compounded monthly. Because interest compounds 12 times a year, the effective annual rate you actually earn is higher than 6% — working out to about 6.17% APY. Enter 6 as the Input Interest, choose Monthly as the input compound, and Annually as the output compound to see this conversion instantly.
Interest can be compounded at different frequencies — annually, semi-annually, quarterly, monthly, daily, or continuously. A nominal rate compounded more frequently produces a higher effective annual return than the same nominal rate compounded less frequently.
This calculator converts a rate at one compounding frequency into the equivalent rate at another, using the Effective Annual Rate (EAR) as the common comparison point. For example, 6% compounded monthly is equivalent to about 6.17% compounded annually.
It compares or converts interest rates of different compounding periods, such as converting a monthly APR into an equivalent annual APY.
Interest can be compounded annually, semi-annually, quarterly, monthly, daily, or continuously.
A nominal rate compounded more frequently produces a higher effective annual return than the same nominal rate compounded less frequently.
The EAR is the common comparison point this calculator uses to convert a rate at one compounding frequency into the equivalent rate at another.
For example, 6% compounded monthly is equivalent to about 6.17% compounded annually.