Manuals/calci/EFFECT

EFFECT(nomrate, npy)

where,

• Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://wikimedia.org/api/rest_v1/":): {\displaystyle nomrate} is the nominal interest rate, and
• Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://wikimedia.org/api/rest_v1/":): {\displaystyle npy} is the number of compounding periods per year.

EFFECT() calculates the effective annual interest rate.

Description

EFFECT(nomrate, npy)

• Arguments Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://wikimedia.org/api/rest_v1/":): {\displaystyle nomrate} and Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://wikimedia.org/api/rest_v1/":): {\displaystyle npy} should be positive numeric values.
• Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://wikimedia.org/api/rest_v1/":): {\displaystyle nomrate} should be >0 and Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://wikimedia.org/api/rest_v1/":): {\displaystyle npy} should be >1.
• For invalid arguments, Calci returns an error message.
• Formula: Effective interest rate Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://wikimedia.org/api/rest_v1/":): {\displaystyle r} is calculated as follows -

Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://wikimedia.org/api/rest_v1/":): {\displaystyle r = (1 + \frac{nomrate}{npy})^{npy} - 1 }

Examples

Consider the following example that shows the use of EFFECT function:

6%	8.5%
3	4

=EFFECT(A1,A2):  Displays 0.06120800000000015 as a result.
=EFFECT(B1,B2):  Displays 0.8774796172119137 as a result.
=EFFECT("6%",4): Displays 0.06136355062499965 as a result.

Related Videos

EFFECT

See Also

• RATE
• INTRATE

References

• Effective Interest Rate