Equivalent Rate Calculator (AER)
FinanceConvert a nominal interest rate compounded at one frequency into the equivalent rate at a different compounding frequency, so you can compare two rates quoted on different bases.
Equivalent Rate
The nominal rate at your target compounding frequency that has the same real annual return
Annual Equivalent Rate (AER)
5.1162
The rate expressed on a once-per-year (annual) compounding basis
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Odeh Ahwal0people find this calculator helpful
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Helpful
Saved
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Frequently Asked Questions
Why would two rates quoted at different frequencies not be directly comparable?
A 5% rate compounded monthly grows your money faster than a 5% rate compounded annually, so the raw numbers alone do not tell the full story.
How is AER different from the equivalent rate?
AER is a special case of the equivalent rate calculation where the target frequency is always once per year.
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