calculate_effective_rate

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

No annotations exist, so description must carry burden. It discloses the formula and purpose, but does not mention any side effects, input format, or output structure. For a simple computation, this is adequate.

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?

Two concise sentences with the formula front-loaded. No wasted words; every sentence adds value.

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 the tool's simplicity (2 parameters, output schema exists), the description is largely complete. It covers the formula and purpose, though adding input unit guidance would improve completeness.

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 coverage is 0%, yet description only mentions nominal rate and compounding implicitly through the formula. It does not clarify input units (decimal vs percentage) or list compounding options beyond default 'monthly'.

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?

Description clearly states it calculates Effective Annual Rate from nominal rate and provides the formula. It implies a specific financial computation but could differentiate more explicitly from sibling tools like calculate_real_return.

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 implies usage for comparing rates with different compounding but does not explicitly state when to use this tool versus alternatives like calculate_future_value or calculate_real_return.

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