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

	A
1	=EFFECT(5/100, 1) = 5.000%
2	=EFFECT(5%, 1) = 5.000%
3	=EFFECT(5%, 2) = 5.062%
4	=EFFECT(5%, 12) = 5.116%
5	=EFFECT(5%, 365) = 5.127%
6	=EFFECT(5, 2) = 1125.000%
7	=EFFECT(5%, -2) = #NUM!
8	=EFFECT("some text", 2) = #VALUE!
9	=EFFECT(5%, "some text") = #VALUE!

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