How to convert compound interest rates
Convert effective rates between days, months, quarters, half-years and years. Choose 365 calendar days or 252 business days.
Step by step
- Enter the effective rate and source period.
- Choose target period and day basis.
- Enter principal and holding days to estimate gross income.
Calculation method
Equivalent rate = (1 + source rate) raised to the target/source term ratio, minus one. A month is 1/12 of a year.
Assumptions and limitations
Do not divide an annual rate by 12. Returns are gross, excluding tax; daily liquidity depends on the contract.
Common questions
Does 12% annually equal 1% monthly?
No. 12% annually equals about 0.948879% monthly. 1% monthly equals 12.682503% annually.