effective_annual_rate
Calculate the effective annual interest rate from a nominal rate and compounding frequency to accurately compare investment returns or loan costs.
Instructions
Calculate effective annual rate from nominal rate
Input Schema
| Name | Required | Description | Default |
|---|---|---|---|
| compoundingPeriods | Yes | Number of compounding periods per year | |
| nominalRate | Yes | Nominal annual rate as decimal |
Input Schema (JSON Schema)
{
"properties": {
"compoundingPeriods": {
"description": "Number of compounding periods per year",
"type": "number"
},
"nominalRate": {
"description": "Nominal annual rate as decimal",
"type": "number"
}
},
"required": [
"nominalRate",
"compoundingPeriods"
],
"type": "object"
}