EFFECT |
EFFECT(nominal_rate, npery) |
Returns the effective interest rate given a nominal interest rate and compounding frequency. |
nominal_rate | The interest rate for the year. |
npery | The number of compounding periods per year. |
REMARKS |
* For an illustrated example refer to the [[Effective Interest]] page. * This function is closely related to the NOMINAL function. * An effective interest rate is an interest rate that is compounded annually making it easy to compare different interest rates. * The Effective Rate is also known as the Annual Rate, Effective Annual Rate (EAR) or Annual Equivalent Rate (AER). * If any of the arguments are not numeric, then #VALUE! is returned. * The "nominal rate" can either be entered with a percentage sign or as a decimal. * If "nominal_rate" = 0, then #NUM! is returned. * If "npery" is not an integer, it is truncated. * If "npery" < 1, then #NUM! is returned. * For the Microsoft documentation refer to support.microsoft.com * For the Google documentation refer to support.google.com |
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1 - If you have an nominal interest rate of 5% compounded annually, what is the effective interest rate. 2 - This is the same as 1. 3 - If you have an nominal interest rate of 5% compounded semi-annually, what is the effective interest rate. 4 - If you have an nominal interest rate of 5% compounded monthly, what is the effective interest rate. 5 - If you have an nominal interest rate of 5% compounded daily, what is the effective interest rate. 6 - where "nominal" > 1 7 - what if npery < 0 8 - what if "nominal_rate" is not numeric 9 - what if "npery" is not numeric |
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