What is the effective annual yield rate of
2.45% compounded monthly?
Convert to a monthly basis
There are 12 months in a year
| Monthly Interest Rate = | 0.0245 |
| 12 |
Monthly Interest Rate = 0.0020416666666667
Set up monthly compounding
From above, we have n = 12
Yield Rate = (1 + monthly rate)n - 1
Yield Rate = (1 + 0.0020416666666667)12 - 1
Yield Rate = 1.002041666666712 - 1
Yield Rate = 1.02477699552 - 1
Yield Rate = 0.024776995519991
Yield Rate Expressed as a percentage = 2.48%
Yield Rate Expressed as a percentage = 2.48%
Common Core State Standards In This Lesson
HSA.SSE.B.3.C
What is the Answer?
Yield Rate = 0.024776995519991
Yield Rate Expressed as a percentage = 2.48%
Yield Rate Expressed as a percentage = 2.48%
How does the Effective Annual Yield Rate Calculator work?
Free Effective Annual Yield Rate Calculator - Figures out the effective annual yield rate of interest entered by compounding daily, weekly, semi-monthly, monthly, quarterly, semi-annually, and continuously.
This calculator has 1 input.
This calculator has 1 input.
What 3 formulas are used for the Effective Annual Yield Rate Calculator?
Effective time = Interest/Number of Compounding Periods
Decimal Rate = (1 + effective time)n - 1
Percentage Rate = 100% * Decimal Rate
Decimal Rate = (1 + effective time)n - 1
Percentage Rate = 100% * Decimal Rate
What 4 concepts are covered in the Effective Annual Yield Rate Calculator?
- compound interest
- the interest you earn on principal and interest
A = (1 + r/n)nt - effective annual yield rate
- Yield rate taking compounding periods into effect
- interest
- payment from a borrower or deposit-taking financial institution to a lender or depositor of an amount above repayment of the principal sum, at a particular rate
- yield
- How much an investment returns in terms of interest rate
