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Effective Annual Rate (EAR), also called Annual Equivalent Rate (AER), is the actual annual interest rate accounting for compounding within the year. It allows comparison of loans or investments with different compounding frequencies.
चरण-दर-चरण मार्गदर्शिका
- 1EAR = (1 + r/n)^n − 1
- 2r = nominal (stated) annual rate, n = compounding periods per year
- 3Daily compounding always gives a higher EAR than monthly, which is higher than annual
- 4APY (Annual Percentage Yield) on savings accounts IS the EAR
हल किए गए उदाहरण
इनपुट
12% nominal, monthly compounding
परिणाम
EAR = 12.68%
(1 + 0.12/12)^12 − 1
इनपुट
12% nominal, daily compounding
परिणाम
EAR = 12.75%
(1 + 0.12/365)^365 − 1
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