What is the effective annual yield rate of 2.45% compounded monthly?

Convert to a monthly basis

There are 12 months in a year

Monthly Interest Rate =

0.0245

12

Monthly Interest Rate = 0.0020416666666667

Set up monthly compounding

From above, we have n = 12 Yield Rate = (1 + monthly rate)^{n} - 1 Yield Rate = (1 + 0.0020416666666667)^{12} - 1 Yield Rate = 1.0020416666667^{12} - 1 Yield Rate = 1.02477699552 - 1

Yield Rate = 0.024776995519991 Yield Rate Expressed as a percentage = 2.48%

What is the Answer?

Yield Rate = 0.024776995519991 Yield Rate Expressed as a percentage = 2.48%

How does the Effective Annual Yield Rate Calculator work?

Figures out the effective annual yield rate of interest entered by compounding daily, weekly, semi-monthly, monthly, quarterly, semi-annually, and continuously. This calculator has 1 input.

What 3 formulas are used for the Effective Annual Yield Rate Calculator?

Effective time = Interest/Number of Compounding Periods

What 4 concepts are covered in the Effective Annual Yield Rate Calculator?

compound interest

the interest you earn on principal and interest A = (1 + r/n)^{nt}

effective annual yield rate

Yield rate taking compounding periods into effect

interest

payment from a borrower or deposit-taking financial institution to a lender or depositor of an amount above repayment of the principal sum, at a particular rate

yield

How much an investment returns in terms of interest rate

Example calculations for the Effective Annual Yield Rate Calculator