- is the nominal interest rate, and
- is the number of compounding periods per year.
- EFFECT(), returns the effective annual interest rate.
- Arguments and should be positive numeric values.
- should be >0 and should be >1.
- For invalid arguments, Calci returns an error message.
- Formula: Effective interest rate is calculated as follows -
Consider the following example that shows the use of EFFECT function:
=EFFECT(A1,A2): Displays 0.06120800000000015 as a result. =EFFECT(B1,B2): Displays 0.08774796172119137 as a result. =EFFECT("6%",4): Displays 0.06136355062499965 as a result.