Syntax:
EFFECT ( nominal-rate , npery )
Description: Computes the effective annual interest rate, given the nominal annual interest rate and the number of compounding periods per year.
Mathematical Formula:
Arguments:
|
Name |
Type |
Description |
|
nominal-rate |
number |
The nominal interest rate. |
|
npery |
number |
The number of compounding periods per year, truncated to integer. |
Return Type and Value: number – The effective annual interest rate.
However, if
• nominal-rate ≤ 0, #NUM! is returned.
• npery < 1, #NUM! is returned.
[Example:
EFFECT(0.0525,4) results in 5.3543%
end example]