Effective Annual Yield (Question from Customer)

In the formula for EAY, what is the value used for t? If they give you the time in a monthly compounded number do you convert to days and put that in the denominator? Or do you just make 12 the exponent? Thanks!

Answer: But EAY is the continuous compounding of nominal interest rate, which is usually just 12 x the monthly compound number. Therefore, you can just make it exp(12*monthly_rate) -1. You may refer to here for more.

http://minute-class.com/finance/watch-out-for-the-units/