Equivalent interest rate calculator
Convert compound interest rates between day, month, quarter, half year and year: find out what 1% a month is per year and vice versa.
How to useConvert a monthly interest rate to an annual rate
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Equivalent interest rate calculator: what it is for
Type a rate and its period to see the equivalent rates for every other period. The table compares the equivalent rate, for compound interest, with the proportional rate, for simple interest.
Useful for comparing investments, loans and credit cards that quote rates for different periods.
How to use
- Type the interest rate.
- Choose the rate's period.
- See the equivalent rates in the table.
When to use it
- Converting a loan's monthly rate to an annual rate.
- Comparing savings accounts, CDs and bonds.
- Solving financial math exercises.
Frequently asked questions
What is 1% a month per year?
With compound interest, 1% a month is equivalent to 12.68% a year, not 12%. The formula is (1 + 0.01)¹² − 1.
How do I convert an annual rate to a monthly rate?
Use (1 + annual rate)^(1/12) − 1. For example, 12% a year is about 0.949% a month.
What about the proportional rate?
It is the simple division (12% a year ÷ 12 = 1% a month), used with simple interest. The table shows both for comparison.
Is it really free?
Yes, 100% free. No sign-up, no subscription and no usage limits. All Tools123 tools are free and run right in your browser.