# Loans – Effective Interest Rate Calculator

Need to calculate your annual effective interest rate on your loan? This is a loan calculator for just this.

## How does this calculator work? The formula is as follows: Annual effective interest rate = (1 + year interest rate / number of interest periods) ^ number of periods – 1.

Annual Effective Rate Calculator
Annual interest rate (%):
Number of interest periods:

Annual effective interest rate:

The calculator will calculate annual effective interest rate for all types of investment or savings product if you enter in annual interest rate and number of compounding periods.

Converting from the annual interest rate to the annual effective interest rate is as simple as typing in the annual interest rate into the field and then clicking the calculate button.

## Why is it important to be able to calculate The annual effective interest rate as opposed to just basing financial decisions out of the ordinary annual interest rate? The significance of the annual effective interest rate is due to the effect of the interest rate compound. The annual average change in value is stated, in addition to the total change in value for the period.

The figures are based on all registered real estate transfers of leisure properties. The average purchase price is calculated by county per quarter. The year used here is the average of the four quarters. Statistics are compiled by Statistics Norway.

What is meant by bonus system? Rules for promotion or relegation in the companies’ bonus rises in car insurance. What is meant by bonus? The bonus system aims to reimburse drivers who are not exposed to injury and, consequently, do not burden their insurance contract with damages.

When interest rate mortgages occur more than once a year, you should rely on the annual effective interest rate as a more accurate picture of the true interest earned instead of the regular annual interest rate.