# Effective vs nominal rate

> 12% compounded monthly is 12.68%. That difference is the covenant you either pass or fail.

Source: https://lopifi.com/tools/rates
Part of: Lopifi — US GAAP books on autopilot, reviewed by a CPA (https://lopifi.com)

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- **Group:** Money

## Inputs

- `nominal` — Nominal annual rate %
- `periods` — Compounds per year

Runs entirely in the browser: no network call, no data leaves the page. The same definition powers the Lopifi Tools Chrome extension.