Manuals/calci/EFFECT

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EFFECT (NominalInterestRate,CompoundingPeriodsPerYear)


where,

  • is the nominal interest rate, and
  • is the number of compounding periods per year.
    • EFFECT(), returns the effective annual interest rate.

Description

EFFECT (NominalInterestRate,CompoundingPeriodsPerYear)

  • 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 -

 

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 0.08774796172119137 as a result.
=EFFECT("6%",4): Displays 0.06136355062499965 as a result.

Related Videos

EFFECT

See Also

References