EFFECT

Annual effective interest rate

Description

Calculates annual effective interest rate when provided with the nominal rate and the number of compounding periods per year.

Function signature

EFFECT(nominalrate: Number, periodsperyear: Number) => Number

Parameter

Description

Nominal rate

The nominal interest rate per year

Periods per year

The number of compounding periods per year

Examples

Formula

Return value

EFFECT(0.001, 4)

0.001000375063

EFFECT(0.1, 4)

0.1038128906

EFFECT(0.5, 4)

0.6018066406

EFFECT(1, 4)

1.44140625

EFFECT(0.5, 6)

0.6164885679