Convert your rate
All equivalents
| Rate | Value |
|---|---|
| Effective annual (E.A.) | 24.0000 % |
| Effective monthly | 1.8088 % |
| Nominal annual, monthly, in arrears | 21.7051 % |
| Nominal annual, monthly, in advance | 21.3195 % |
| Effective two-month | 3.6502 % |
| Nominal annual, two-month, in arrears | 21.9014 % |
| Nominal annual, two-month, in advance | 21.1301 % |
| Effective quarterly | 5.5250 % |
| Nominal annual, quarterly, in arrears | 22.1001 % |
| Nominal annual, quarterly, in advance | 20.9430 % |
| Effective semiannual | 11.3553 % |
| Nominal annual, semiannual, in arrears | 22.7106 % |
| Nominal annual, semiannual, in advance | 20.3947 % |
Equivalent rates give the same cost or return over a year. “In arrears” means paid at the end of the period; “in advance,” at the beginning.
The formulas
Nominal in advance → E.A.: (1 − j/m)^−m − 1
E.A. → period rate: i = (1 + E.A.)^(1/m) − 1
In advance, for the period: ia = i / (1 + i)
j is the nominal annual rate and m the number of periods in the year (12 monthly, 6 two-month, 4 quarterly, 2 semiannual).
Questions about rates
What is the difference between a nominal and an effective rate?
The nominal rate is an annual “reference” rate that is split into periods; the effective rate includes the compounding of interest and shows what is really paid or earned in a year.
What do “month in arrears” and “month in advance” mean?
In arrears: interest is paid at the end of the month. In advance: it is paid at the start, so the effective rate is higher for the same nominal rate.
Why does converting rates matter?
To compare products you have to bring them to the same basis. The effective annual rate is the standard way to compare them.
To understand the calculation
Effective vs. nominal rate: differences and examples
What effective annual, nominal in-arrears and nominal in-advance rates are, how to convert them and why it matters when comparing loans and savings.
Read the guide →Usury rate in Colombia: what it is and how it is calculated
The usury rate is the legal interest cap in Colombia: 1.5 times the current bank interest rate. What it is, who certifies it and where to see the current one.
Read the guide →