Manuals/calci/NOMINAL

NOMINAL (EffectiveInterestRate,NoOfCompoundingPeriods)

Where

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

Description

NOMINAL (EffectiveInterestRate,NoOfCompoundingPeriods)

• 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 -

$ER=(1+{\frac {NominalRate}{nperyear}})^{nperyear}-1$

where

$ER$ - Effective Interest Rate

$NominalRate$ - Nominal Interest Rate

$nperyear$ - number of compounding periods per year

• Arguments $ER$ and $nperyear$ should be numeric, else Calci returns #N/A error message.
• If $ER$ < 0 or if $nperyear$ < 1, Calci returns #N/A error message.
• If $nperyear$ 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.

Related Videos

NOMINAL Function

See Also

• INTRATE

References

• Nominal Interest Rate
• Effective Interest Rate

• List of Main Z Functions

• Z3 home