Difference between revisions of "Manuals/calci/NOMINAL"

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*The relationship between Effective Interest Rate and Nominal Interest Rate is as follows -
 
*The relationship between Effective Interest Rate and Nominal Interest Rate is as follows -
  
<math>ER = \frac{1 + \frac{Nominal_Rate}{nperyear}}^(nperyear) - 1</math>  
+
<math> ER = (1 + \frac{NominalRate}{nperyear})^{nperyear} - 1 </math>  
  
where ER - Effective Interest Rate
+
where
 +
 +
*<math>ER</math> - Effective Interest Rate
  
      Nominal_Rate - Nominal Interest Rate
+
<math>NominalRate</math> - Nominal Interest Rate
  
      nperyear - number of compounding periods per year
+
<math>nperyear</math> - number of compounding periods per year
 
*Arguments <math>ER</math> and <math>nperyear</math> should be numeric, else Calci returns #N/A error message.
 
*Arguments <math>ER</math> and <math>nperyear</math> should be numeric, else Calci returns #N/A error message.
 
*If <math>ER</math> &lt; 0 or if <math>nperyear</math> &lt; 1, Calci returns #N/A error message.
 
*If <math>ER</math> &lt; 0 or if <math>nperyear</math> &lt; 1, Calci returns #N/A error message.

Revision as of 08:59, 18 February 2014

NOMINAL(ER, nperyear)

Where

  • is the effective interest rate, and
  • is the number of compounding periods per year.

NOMINAL() calculates the nominal annual interest rate.

Description

NOMINAL(ER, nperyear)

  • Nominal Interest Rate is calculated depending on the effective interest rate and the number of compounding periods per year.
  • The relationship between Effective Interest Rate and Nominal Interest Rate is as follows -

where

  • - Effective Interest Rate

- Nominal Interest Rate

- number of compounding periods per year

  • Arguments and should be numeric, else Calci returns #N/A error message.
  • If < 0 or if < 1, Calci returns #N/A error message.
  • If is not an integer, it is truncated.

Examples

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

5.75%
5
=NOMINAL(A1,A2) displays 0.05622136652263632 as a result.
=NOMINAL("6.10%",6) displays 0.05950499347618399 as a result.

See Also

References