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.
💡
Pro Tip
When comparing savings accounts, look for the APY (= EAR), not the APR. Banks are required to disclose APY for deposits by the Truth in Savings Act.
⭐
Did You Know?
Continuous compounding — where n approaches infinity — is described by the formula EAR = e^r − 1. At 12% nominal, this gives 12.7497% EAR — almost identical to daily compounding.
References
🔒
100% இலவசம்
பதிவு தேவையில்லை
✓
துல்லியமான
சரிபார்க்கப்பட்ட சூத்திரங்கள்
⚡
உடனடி
தட்டச்சு செய்யும்போது முடிவுகள்
📱
மொபைல் தயார்
அனைத்து சாதனங்கள்