How we calculate
Compound conversion accounts for interest earning on previously accumulated interest.
Formula used
To convert monthly to annual: raise (1 + monthly rate) to the 12th power. For the reverse, take the 12th root.
(1 + i_mensal)¹² = (1 + i_anual)
Practical example
A 1% monthly rate equals about 12.68% annually (not 12%, which would be the simple/linear conversion).
How to interpret the result
The 'compound equivalent' is correct for comparing investments; the 'simple equivalent' is shown only for reference.
Limitations
Assumes uniform compound capitalization, without accounting for specific product conventions.