This function calculates the effective annual interest rate for a given nominal annual interest rate and the number of compounding periods per year.

Syntax

EFFECT(nomrate,comper)

Arguments

This function has these arguments:

Argument |
Description |

nomrate |
Nominal interest rate |

comper |
Number of compounding periods; if not an integer, the number is truncated |

Remarks

The #VALUE! error is returned if either argument is nonnumeric. The #NUM error is returned if nomrate is less than or equal to zero or if comper is less than one. Comper is truncated to an integer.

Data Types

Accepts numeric data for both arguments. Returns numeric data.

Examples

EFFECT(J12,B3)

EFFECT(R12C10,R3C2)

EFFECT(6.5%,8) gives the result 0.66878782

See Also