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 = 1.002041666666712 - 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
