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# How do you calculate the annual equivalent rate?

**The formula for calculating the annual equivalent rate (AER) isAER = (1 + r/n)&supn - 1.** In the formula, "r" is the stated interest, and "n" is the number of times interest is paid. Investors use AER to get a better picture of the interest earned in a year.

AER adjusts for compounding interest. Compound interest is interest added to the principal for a deposit or a loan. As a result, AER is usually higher than an annual percentage rate (APR), and it gives a true picture of interest earnings, according to Investing Answers. This interest on top of interest allows a deposit or loan to grow faster. AER is a good tool for comparing investment products.

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## What are some common retail markup formulas?

A: One simple formula retailers can use to mark-up prices is Retail Price = [(cost of item) ÷ (100 - markup percentage)] x 100, according to Shopify. Another ... Full Answer >Filed Under: -
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## What is the inventory turnover ratio?

A: The inventory turnover ratio is a formula that displays how many times inventory is replaced over a period of time by dividing cost of goods sold over aver... Full Answer >Filed Under: -
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## What is the formula for total profit?

A: The formula for total profit, or net profit, is total revenue in a given period minus total costs in a given period. If a business generates $250,000 in to... Full Answer >Filed Under: -
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## How do you manually calculate a mortgage payment?

A: To calculate your mortgage payment manually, apply the interest rate (r), the principal (B) and the loan length in months (m) to this formula: P = B[(r/12)... Full Answer >Filed Under: