15-6-2

Interest Conversion

kExample 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

EFF =

1+

APR/100n–1 ⋅ 100

 

 

n

1

APR = 1+ EFF100 n –1 ⋅ n ⋅100

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