Effective Interest Rate Calculator
The effective interest rate calculator calculates the return on an investment or the rate owed in interest on a loan when compounding is applied. Interest is a payment made by a borrower to a lender or investor in return for the use of borrowed funds. Interest rates can be expressed as a percentage of the principal, as a yearly rate, or as a simple interest rate. But interest rates are only one side of the coin. When you have to repay a loan, what matters most is the effective interest rate, which is the total return on a loan as a ratio to its nominal interest rate.