Interest Rate Converter
Convert between APR, APY, monthly rates, and effective annual rates. Calculate compound interest effects and compare different rate types for loans and investments.
Rate Conversion Details
Convert From
APR (Annual Percentage Rate)
Select the type of interest rate you want to convert from
Interest Rate
8.0%
%
Enter the interest rate (0.1% to 30%)
Compounding Frequency
Monthly (12 times/year)
How often interest is compounded per year
Principal Amount
₹1,00,000
₹
Optional: Enter amount to see interest calculations
Time Period
1 year
years
Time period for interest calculation (1 to 30 years)
Rate Conversion Results
8.0% APR compounded monthly is equivalent to:
APR
Nominal Annual Rate
8.00%
r = nominal rate
APY
Effective Annual Yield
8.30%
(1 + r/n)^n - 1
Monthly Rate
Per Month
0.667%
r ÷ 12
Daily Rate
Per Day
0.022%
r ÷ 365
Interest Calculation
₹8,000
Simple Interest
₹8,300
Compound Interest
₹1,08,300
Total Amount
8.30%
Effective Rate
Rate Comparison Table
| Compounding | APR | APY | Difference | ₹1L in 1 Year |
|---|
Real-World Rate Examples
Savings Account
3.5% APY
Typical savings account with monthly compounding
₹1L → ₹1,03,556 in 1 year
Fixed Deposit
7.0% APR
Bank FD with quarterly compounding
₹1L → ₹1,07,186 in 1 year
Home Loan
8.5% APR
Reducing balance with monthly compounding
EMI: ₹8,736 for ₹10L, 20 years
Credit Card
36% APR
Monthly compounding on outstanding
₹1L debt → ₹1,42,576 in 1 year
About Interest Rate Converter
The Interest Rate Converter helps you convert between different types of interest rates (APR, APY, monthly, daily) and understand the effects of compounding. It's essential for comparing loans, investments, and savings products accurately.
Key Interest Rate Types
APR (Annual Percentage Rate)
The nominal annual rate without considering compounding. Used for loans and credit cards.
Formula: APR = Periodic Rate × Number of Periods
Example: 1% monthly = 12% APR
APY (Annual Percentage Yield)
The effective annual rate including compounding effects. Used for savings and investments.
Formula: APY = (1 + r/n)^n - 1
Example: 12% APR monthly = 12.68% APY
Effective Annual Rate (EAR)
The actual annual rate earned or paid after compounding. Same as APY for investments.
Formula: EAR = (1 + i/n)^n - 1
Example: Accounts for fees and compounding
Continuous Compounding
Interest compounded continuously throughout the year. Maximum compounding effect.
Formula: A = P × e^(rt)
Example: 10% continuous = 10.52% effective
Conversion Formulas
| Conversion | Formula | Example | Description |
|---|---|---|---|
| APR to APY | APY = (1 + APR/n)^n - 1 | 12% APR monthly → 12.68% APY | Adds compounding effect |
| APY to APR | APR = n × ((1 + APY)^(1/n) - 1) | 12% APY monthly → 11.39% APR | Removes compounding effect |
| APR to Monthly | Monthly = APR ÷ 12 | 12% APR → 1% monthly | Simple division |
| Monthly to APR | APR = Monthly × 12 | 1% monthly → 12% APR | Simple multiplication |
| Continuous to Effective | EAR = e^r - 1 | 10% continuous → 10.52% EAR | Uses exponential function |
Compounding Frequency Impact
Annual Compounding
10% → 10.00%
Interest added once per year
₹1L → ₹1,10,000
Semi-Annual
10% → 10.25%
Twice per year (every 6 months)
₹1L → ₹1,10,250
Quarterly
10% → 10.38%
Four times per year
₹1L → ₹1,10,381
Monthly
10% → 10.47%
Twelve times per year
₹1L → ₹1,10,471
Daily
10% → 10.52%
365 times per year
₹1L → ₹1,10,516
Continuous
10% → 10.52%
Infinite compounding
₹1L → ₹1,10,517
Practical Applications
Banking Products
- Savings Accounts: Compare APY across banks
- Fixed Deposits: Understand effective returns
- Recurring Deposits: Calculate maturity amount
- Loans: Compare true cost of borrowing
Investments
- Mutual Funds: Compare CAGR vs annual returns
- Bonds: Calculate yield to maturity
- Real Estate: Compare rental yield rates
- Stock Returns: Convert periodic to annual
Credit Products
- Credit Cards: Understand effective interest
- Personal Loans: Compare APR across lenders
- Home Loans: Calculate effective borrowing cost
- Auto Loans: Compare financing options
Business Finance
- Working Capital: Calculate effective cost
- Equipment Leasing: Compare lease vs buy
- Invoice Discounting: Calculate effective yield
- Trade Credit: Evaluate payment terms
Note: This calculator provides estimates based on standard interest rate formulas. Actual rates may vary based on financial institution policies, fees, and specific terms. APR calculations may not include all fees and charges. Always read the fine print and consult with financial professionals for important financial decisions.