# Effective Interest Rate Calculator

This calculator calculates the effective interest rate for a given nominal interest rate and compounding frequency.

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The effective interest rate is the actual amount of interest earned or paid on an investment or loan over a specific period of time, taking into account the effect of compounding. The calculator allows the user to enter the nominal interest rate and the compounding frequency (such as monthly, quarterly, or annually), and then calculates the corresponding effective interest rate.

Effective interest rate formula

where j - nominal interest rate,

m - the number of interest accrual periods

It is clear that for the same nominal interest rate, a more frequent accrual period results in a more profitable investment.

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