Compound Interest Calculator
Compare and convert interest rates between different compounding frequencies
📈 Interest Rate Conversion
📊 Conversion Results
Equivalent Interest Rate
6.16778%
6% monthly (APR) = 6.16778% annually (APY)
How This Works
Input Rate
6.00%
Input Frequency
Monthly
Output Frequency
Annually
Equivalent Rate
6.16778%
Formula Used
APY = (1 + APR/n)^n - 1
Where n is the number of compounding periods per year
📚 Understanding Compound Interest
APR vs APY
APR (Annual Percentage Rate) is the simple interest rate, while APY (Annual Percentage Yield) includes the effect of compounding. APY is always higher than APR when compounding occurs.
Compounding Frequency
More frequent compounding results in higher effective yields. Daily compounding yields more than monthly, which yields more than annually.
Practical Applications
Use this calculator to compare loan offers, understand savings account yields, or convert between different interest rate formats for accurate comparisons.