If you are given the annual compound rate is 15%, how much is it for quarterly, monthly and daily? Below calculation shows you how to calculate compound interest rate for those time-frame.
We use AR is term for Annual Rate, and T is Time Period, the value for T will be 4, 12, 365 for quarters, months and days in one year respectively.
The general formulation that we will use look like: R = (1+AR) ^ (1/T).
- Quarterly Compound Rate – QR = (1+15%) ^ (1/4) – 1
- Monthly Compound Rate – MR = (1+15%) ^ (1/12) – 1
- Daily Compound Rate – DR = (1 + 15%) ^ (1/365) -1
Apply above formulation into an Excel sheets the compound rate for each is revealed below:
- QR = 3.56%
- MR = 1.17%
- DR = 0.04%