Compare nominal rate, EAR from compounding, and true effective annual rate with fees.
EAR (Compounding Only)
12.68%
Stated Nominal Rate
12%
True Effective Rate (Including Fees)
14.98%
Est. 1-Year Interest Paid
$1,268.25
Calculates EAR = (1 + r/m)^m - 1 from compounding, and incorporates upfront fees into total annual financing cost relative to net proceeds.
1. Input nominal rate and compounding interval. 2. Optionally enter principal and upfront fees to calculate fee-inclusive effective rate. 3. View side-by-side rate comparison.
Provides a transparent comparison showing how compounding frequency and upfront fees raise the true annual cost above nominal rates.
FAQ
Compounding interest multiple times per year and paying upfront fees both increase your total financial cost relative to stated nominal rate.
Effective Rate provides annual yield perspective over a 1-year period, while APR evaluates total amortized borrowing cost over loan term.
Categories · Banking & Interest