15-6-2

Interest Conversion

IExample 2

What is the nominal interest rate ([APR]) on a certificate that offers an annual effective interest rate ([EFF]) of 5%, compounded bi-monthly (N = 6)?

Tip

• You can change any value and then tap a button to recalculate.

Calculation Formulas

n

EFF = 1+ APR/100 –1 100 n

 

 

 

EFF

1

 

 

 

APR =

1+

n

–1

n 100

100

 

 

 

 

 

 

 

 

20060301