Description Computes the effective annual interest rate, which adjusts the nominal rate to show the effect of compounding.
Syntax EFFECT ( nominal_rate, periods)
| Argument | Description |
|---|---|
| nominal_rate | The nominally quoted interest rate. |
| periods | The number of compounding periods per year. Decimal values are truncated to integers. |
Equation
Examples This function returns 0.0696:
EFFECT(0.0675,12)
This function returns 0.0686:
EFFECT(0.0675,2)
See Also NOMINAL
