Calculating Nominal Annual Interest Rate (NAIR)
(A Step by step calculation)
Nominal Annual Interest Rate Calculator
The nominal interest rate is calculated by effective interest and effective periods per year.
Nominal Annual Interest Rate Formula :
Nominal Interest Rate = n * [(1 + i)1/n - 1]
i is the Effective Annual Interest Rate
n is the Number of compounding periods per year
On the other hand, the nominal interest rate equation can also be calculated based on the real rate of interest and inflation rate.
Mathematically, the nominal interest rate equation is represented as below,
Nominal Interest Rate Formula (Using Real Interest Rate and Inflation Rate)
Nominal interest rate = [(1 + Real Interest Rate) * (1 + Inflation Rate)] - 1