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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 is the formula for calculating earned value?

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## How do you calculate net credit sales?

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Q:
## What is the formula for calculating net sales from a balance sheet?

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Q:
## What is the inventory turnover ratio?

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