If your savings account earns you a 0.05% interest per year (which is a REALLY terrible interest rate, honestly), you earn $5 in interest for every $10,000 you’ve saved. A year.

An example Let's say your lender offers you a $200,000 mortgage at 4% interest. The lender charges one discount point ($2,000) and an origination fee of $750, making the total up-front cost $2,750 ...

The formula to calculate the Effective Annual Interest Rate is: EAR = (1 + 𝑖/𝑛) ^ n – 1 where: 𝑖 is the nominal interest rate. 𝑛 is the number of compounding periods per year.

Your spreadsheet should look like this (the arrow is pointing to the formula for demonstrative purposes), with a calculated interest rate of 10.05%. Image source: Getty Images.