How to use the Interest Rate Conversion Calculator?

1. Compound or Simple: SELECT Compound or Simple for the interest capitalization method. By default, use "Compound" as this is the standard and most common method for applying interest rates.

2. Blank box [rate]: ENTER the known rate for which a specific equivalent is being sought. If the rate is, for example, 10.25%, enter 10.25, not 10.25%, not 0.1025. Important note: always use a period (.) to separate decimals.

3. Eff. / Per. or Nominal (APR): SELECT the interest rate type as Effective or Periodic (Effective/Periodic) or Nominal.

   Note: For practical purposes, an effective rate and a periodic rate are the same: the rate to be used in calculations, since nominal rates are only for reference. The difference between effective and periodic is simply that the former represents an annual periodic rate (annual effective rate) and the latter to any other compounding period, for example, monthly.

4. Blank box [periodicity]: ENTER the compounding periods per year of the rate. The periodicity of the rate is a number that represents the number of times a given period fits into 1 year. Important note: if necessary, always use a period (.) to separate decimals.

   Examples for common rates:

   Annual: 1 year fits 1 time in 1 year. Therefore, the periodicity of the rate is 1

   Semiannual: 1 semester fits twice into 1 year. Therefore, the rate period is 2

   Quarterly: 1 quarter occurs 4 times in 1 year. Therefore, the rate period is 4

   Monthly: 1 month fits into 12 times in 1 year. Therefore, the rate period is 12

   Daily: 1 day can fit 365, 366, 360, or 365.25 times in one year, depending on whether it is considered a conventional, leap, commercial, or Julian year. Therefore, the periodicity of the rate is 365, 366, 360, 365.25

   Examples for atypical rates:

   Biennial: 2 years fit ½ times (0.5 times) in 1 year. Therefore, the periodicity of the rate is 0.5

   Five-year: 5 years fit 1/5 times (0.2 times) into 1 year. Therefore, the periodicity of the rate is 0.2

   Ten-year: 10 years fit 1/10 of a time (0.1 times) into 1 year. Therefore, the periodicity of the rate is 0.1

   Continuous: 1 continuous period fits infinitely many times into one year. Therefore, the compounding periods per year of the rate is infinite. Alternatively, we can say that one continuous period fits "many, many" times into one year. Therefore, the periodicity of the rate is a large number (e.g., 31,000,000).

   Important note. A continuous rate only makes sense when expressed in a Nominal term (APR), not effective or periodic (Eff. / Per.). Therefore, always verify that continuous rates are expressed in nominal terms when working with them.

   Further explanation.

   The most precise result can be found using the limit of the exponential function. For practical purposes, using a large number, such as the periodicity of a rate per second (approximately 31,000,000), is sufficient to determine a continuous rate. For example, an annual effective rate of 15% is equivalent to a continuous rate of:

   • 13.97619449% if a periodicity of 31,000,000 is used.

   • 13.97619424% if the limit of the exponential function is used.

   Quasi-continuous rates:

   Hourly: 1 hour fits 8,760 times in a conventional year (365 days * 24 hours). Therefore, the periodicity of the rate is 8,760

   Per minute: 1 minute fits 525,600 times in a conventional year (365 days * 24 hours * 60 minutes). Therefore, the periodicity of the rate is 525,600

   Per second: 1 second occurs 31,536,000 times in a conventional year (365 days * 24 hours * 60 minutes * 60 seconds). Therefore, the periodicity of the rate is 31,536,000

   Note for users of financial calculators. To express an advance rate, use positive number. Do not use negative numbers (e.g., quarterly in advance: -4). Instead, use the "Due/Advance" drop-down menu designed for this purpose.

5. Due or Advance: SELECT Due or Advance for the rate. By default, use "Due" since this is the usual and generalized way to apply interest rates.

6. Value highlighted in yellow: RESULT. It is the equivalence (conversion) in the required terms for the entered (known) rate.

7. Copy Result: this button allows you to copy the RESULT for use in the same calculator or elsewhere.

8. AC (All Clear): this button clears the input fields.