Calculators for making sense of rates
Five tools that cut through the numbers on a quote — convert between the rate you're shown and the rate you actually get, estimate doubling time, score a return, and see what inflation leaves behind.
Convert & compare rates
APY
depositsBanks quote an APR; your money earns the APY. Convert between them and compare daily, monthly and annual compounding.
Open calculatorEffective Annual Rate
EARThe one honest number behind any quoted rate — for savings and loans alike, at seven frequencies up to continuous compounding.
Open calculatorRule of 72
shortcutDivide 72 by the rate: years to double your money. Check the mental shortcut against the exact answer, and watch doublings stack.
Open calculatorMeasure the outcome
ROI
scorecardDid it pay off? Total return on any investment plus the annualized rate (CAGR) that makes it comparable to everything else.
Open calculatorInflation
headwindCompound interest working against you: what today's money will actually buy later, and how fast purchasing power halves.
Open calculatorRead a rate for what it really is
A quoted rate hides more than it shows. These steps turn it into numbers you can actually compare.
Find the true rate
Banks quote an APR, but compounding means your money earns — or costs — the APY. Convert between them so you're comparing like with like.
Estimate doubling time
For a quick gut check, divide 72 by the rate to see how many years it takes to double. Then compare the shortcut to the exact answer.
Score the result
After the fact, measure what an investment actually returned — both the total gain and the annualized rate (CAGR) that makes it comparable to anything else.
Account for inflation
A nominal return flatters. See what your money will really buy later, and how fast rising prices halve its purchasing power.
The rates behind the rates
Almost every financial product is sold on a headline rate that isn't quite the number you experience. Compounding, fees and inflation each drive a wedge between the rate quoted and the rate that lands in — or leaves — your account. Knowing how to convert between them is what lets you compare offers honestly.
The same maths runs in both directions. Compounding that works for you on a savings account works against you on a loan, and inflation is simply compound interest applied to prices instead of your balance.
APR vs APY
APR is the simple annual rate; APY includes the effect of compounding within the year. On the same nominal rate, more frequent compounding gives a higher APY — the number your money actually earns.
Compounding frequency
How often interest is added — daily, monthly, annually. The more often, the more the effective rate exceeds the nominal one, though the gains taper off as frequency rises.
Effective annual rate
The single honest figure behind any quote, for savings and loans alike. It rolls compounding into one comparable number, right up to continuous compounding.
Rule of 72
Divide 72 by the annual rate to estimate the years to double your money. A handy mental shortcut that's remarkably close to the exact figure for typical rates.
CAGR
The compound annual growth rate — the steady yearly rate that would turn your start value into your end value. It's what makes returns over different periods comparable.
Real vs nominal
Nominal figures ignore inflation; real figures subtract it. A 6% return with 3% inflation is only about 3% in real purchasing power — the number that actually matters.
How frequency lifts the effective rate
A 6% nominal annual rate, compounded at different frequencies. The more often it compounds, the higher the effective annual rate you truly earn.
| Compounding | Effective annual rate | Extra vs annual |
|---|---|---|
| Annually | 6.000% | — |
| Monthly | 6.168% | +0.168% |
| Daily | 6.183% | +0.183% |
| Continuously | 6.184% | +0.184% |
The jump from annual to monthly compounding is the meaningful one; beyond that, the gains shrink fast. The effective annual rate calculator handles all seven frequencies.