<P> If the monthly interest rate j is known and remains constant throughout the year, the effective annual rate can be calculated as follows: </P> <Dl> <Dd> r = (1 + j) 12 − 1 (\ displaystyle r \ =\ (1 + j) ^ (12) - 1) </Dd> </Dl> <Dd> r = (1 + j) 12 − 1 (\ displaystyle r \ =\ (1 + j) ^ (12) - 1) </Dd> <P> In accountancy the term effective interest rate is used to describe the rate used to calculate interest expense or income under the effective interest method . This is not the same as the effective annual rate, and is usually stated as an APR rate . </P>

How do you find the effective interest rate