effective_annual_rate

Does the description disclose side effects, auth requirements, rate limits, or destructive behavior?

No annotations are provided, so the description carries the full burden of behavioral disclosure. The description only states what the tool does ('calculate'), but doesn't disclose any behavioral traits such as whether it's a pure computation (likely read-only), what format the output might be in, error conditions, or computational limits. For a calculation tool with zero annotation coverage, this is a significant gap.

Agents need to know what a tool does to the world before calling it. Descriptions should go beyond structured annotations to explain consequences.

Is the description appropriately sized, front-loaded, and free of redundancy?

The description is extremely concise and front-loaded with a single clear sentence: 'Calculate effective annual rate from nominal rate'. Every word earns its place, with zero wasted text or unnecessary elaboration. It efficiently communicates the core purpose without any structural issues.

Shorter descriptions cost fewer tokens and are easier for agents to parse. Every sentence should earn its place.

Given the tool's complexity, does the description cover enough for an agent to succeed on first attempt?

Given that this is a simple calculation tool with 2 parameters and 100% schema coverage, the description is minimally adequate. However, with no annotations and no output schema, the description doesn't provide enough context about what the tool returns or its behavioral characteristics. For a calculation tool, users would benefit from knowing the output format or units, but the description doesn't address this.

Complex tools with many parameters or behaviors need more documentation. Simple tools need less. This dimension scales expectations accordingly.

Does the description clarify parameter syntax, constraints, interactions, or defaults beyond what the schema provides?

Schema description coverage is 100%, so the input schema already fully documents both parameters ('nominalRate' and 'compoundingPeriods') with clear descriptions. The tool description doesn't add any parameter-specific information beyond what's in the schema. According to scoring rules, when schema coverage is high (>80%), the baseline is 3 even with no param info in the description.

Input schemas describe structure but not intent. Descriptions should explain non-obvious parameter relationships and valid value ranges.

Does the description clearly state what the tool does and how it differs from similar tools?

The description clearly states the tool's purpose: 'Calculate effective annual rate from nominal rate'. It specifies the verb ('calculate') and the resource ('effective annual rate'), and distinguishes it from siblings by focusing on a specific financial calculation. However, it doesn't explicitly differentiate from similar tools like 'calculate_irr' or 'capm_expected_return' which are also financial calculation tools.

Agents choose between tools based on descriptions. A clear purpose with a specific verb and resource helps agents select the right tool.

Does the description explain when to use this tool, when not to, or what alternatives exist?

The description provides no guidance on when to use this tool versus alternatives. It doesn't mention any prerequisites, context for application, or comparison to sibling tools like 'calculate_irr' or 'future_value'. The agent must infer usage solely from the tool name and description.

Agents often have multiple tools that could apply. Explicit usage guidance like "use X instead of Y when Z" prevents misuse.