The formulas to calculate effective interest rate are:

$$EIR = \frac{F - P}{P}$$

$$EIR = (1 + i)^n - 1$$

Where:

• $EIR$ is the effective interest rate.
• $F$ is the future value.
• $P$ is the principal amount.
• $i$ is the nominal interest rate.
• $n$ is the number of periods.