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.