A quoted rate and the rate you actually pay are often different. A card at 19.99% APR charges 19.99%/12 each month, and interest builds on interest, so over a year you pay more than 19.99%.
- The nominal rate (APR) is the rate per period times the number of periods: 1.67% a month is 19.99% nominal.
- The effective annual rate (APY or EAR) includes compounding: (1 + nominal / n)^n - 1.
Excel has both directions: =EFFECT(nominal_rate, npery) and =NOMINAL(effect_rate, npery), where npery is the number of compounding periods per year.
Compare rates only on the same basis. A savings account at 5.20% compounded daily pays more than one at 5.25% compounded once a year.
Going from an annual discount rate to a monthly one, take the twelfth root, (1 + annual)^(1/12) - 1, not annual / 12, when the annual rate is already effective.