How do you calculate an effective annual percentage rate?

Answer by  UpwardBoundPrecalcTutor (128)

Stated rate = i , number of billing periods=n. Semiannual n=2, quarterly n=4 monthly n=12 daily n=365. If monthly with stated rate of 6%. Here i=0. 06 so n=12. Over the whole year, the actual interest rate is r = (1+ 0. 06/12)^(12) - 1. 100r = effectiveannualpercentrate. General formula is r = (1 + i/n)^(n)- 1 where i=statedrateasdecimal n=compound periods

Answer by  BrianSJ (524)

Divide the nominal interest rate by the number of periods per year, add one, and raise that number to the power of the number of periods per year.

Answer by  senthilkumar (299)

Annual percentage rate is calculate in =PMT(rate,nper,pv,fv,type). for example (. 08/12,360,100000) (. 08/12) means a monthly rate to find monthly payments. 360 means number of periods. 1,00,000 means present value.

Answer by  unni (259)

we can calculate the annual percentage of the rate from the following formula I = PNR/100 From this we can calculate the rate that is R = 100I/PN