Annual compound interest rate equivalent to a periodical compound interest rate formula
Financial acronyms
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Description of the Annual compound interest rate equivalent to a periodical compound interest rate formula
Formula for the calculation of an annual compound interest rate which is equivalent to a periodical compound interest rate.
Formula
\[ r_{a}=\left (1 + r_{m}\right )^{m}-1 \ \]
Symbols
\(m\ \)
Number of discount periods per year
\(r_{m}\ \)
Periodic interest rate for a period of 1/m years