Is there a formula to convert an A.E.R. ([SIZE=-1]Annual Equivalent Rate[/SIZE]) to a C.A.R. ([SIZE=-1]Compound Annual Rate[/SIZE]). In comparing interest rates by 2 banks; one uses C.A.R. and the other uses A.E.R. but which of the two banks offer the best rate.
A.E.R. is forward looking and tells what the rate of interest would be if the nominal rate were compounded annually; C.A.R. is backward looking and is measure of your rate of return.