All Tools Blog Contact

Tax and Interest Rate Converter - Convert Between Different Rate Formats

Free online tax and interest rate converter. Convert between percentage and decimal formats for tax rates, and between APR and APY for interest rates.

Convert between different formats of tax rates and interest rates with this simple and accurate converter. Instantly transform percentage rates to decimal format for tax calculations, or convert between Annual Percentage Rate (APR) and Annual Percentage Yield (APY) for interest rates.

Common Rate Conversions

Tax Rate: Percentage to Decimal

25% = 0.25

Tax Rate: Decimal to Percentage

0.15 = 15%

Interest Rate: APR to APY

5% APR = 5.12% APY

Interest Rate: APR to APY

10% APR = 10.47% APY

Interest Rate: APR to APY

15% APR = 16.08% APY

Interest Rate: APR to APY

20% APR = 21.94% APY

How This Tool Works

Our Tax and Interest Rate Converter tool makes it easy to convert between different rate formats:

  1. Select the type of conversion you want to perform (Tax Rate or Interest Rate)
  2. Enter the value you want to convert in the input field
  3. View the converted result instantly
  4. Copy the result to your clipboard by clicking the copy button

The converter supports the following conversions:

  • Tax Rate Conversion - Convert between percentage format (e.g., 25%) and decimal format (e.g., 0.25)
  • Interest Rate Conversion - Convert between Annual Percentage Rate (APR) and Annual Percentage Yield (APY)

For interest rate conversion, we use the formula:

APY = (1 + APR/n)^n - 1

where n is the number of compounding periods per year (we assume monthly compounding, so n=12)

This converter is useful for:

  • Tax calculations and financial planning
  • Comparing different interest rates and investment returns
  • Understanding the true cost of loans and credit cards
  • Financial analysis and reporting

Frequently Asked Questions

What's the difference between percentage and decimal format for tax rates?

Tax rates can be expressed in two equivalent formats:

  • Percentage format - Expressed as a percentage (e.g., 25%, 15%, 10%)
  • Decimal format - Expressed as a decimal (e.g., 0.25, 0.15, 0.10)

To convert from percentage to decimal, divide by 100 (e.g., 25% = 25/100 = 0.25)

To convert from decimal to percentage, multiply by 100 (e.g., 0.15 = 0.15 × 100 = 15%)

Both formats represent the same value, but they're used in different contexts. Percentage format is more intuitive for most people, while decimal format is often used in calculations.

What's the difference between APR and APY?

APR (Annual Percentage Rate) and APY (Annual Percentage Yield) are two different ways to express interest rates:

  • APR - The simple interest rate for a year, without considering the effect of compounding. It's the rate you typically see advertised for loans and credit cards.
  • APY - The actual interest rate you earn or pay over a year, taking into account the effect of compounding. It's the rate you typically see for savings accounts and investments.

The key difference is that APY includes the effect of compounding, while APR does not. This means that for the same nominal interest rate, APY will be higher than APR when interest is compounded more frequently than annually.

For example, a 5% APR with monthly compounding would have an APY of approximately 5.12%.

How accurate is this rate converter?

This converter performs precise mathematical conversions between different rate formats:

  • For tax rates, the conversion is mathematically exact (percentage to decimal is simply division by 100, and decimal to percentage is multiplication by 100)
  • For interest rates, we use the standard formula for converting APR to APY, assuming monthly compounding (n=12)

The results are accurate to multiple decimal places, with the display precision adjusted based on the type of conversion.

It's important to note that real-world interest rates may have additional factors (like fees) that aren't captured in this simple conversion.

When would I need to convert between these rate formats?

Converting between rate formats is useful in many financial scenarios:

  • Tax calculations - Converting between percentage and decimal formats for tax rate calculations
  • Loan comparisons - Converting APR to APY to compare the true cost of different loans
  • Investment analysis - Converting between APR and APY to compare different investment returns
  • Financial reporting - Converting between formats for financial statements and reports
  • Budgeting - Converting tax rates for budget calculations
  • Credit card analysis - Understanding the true cost of credit card interest